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Tuesday, April 5, 2016 Vol. 11 No. 178
PHL wants own shipyards to meet domestic demand
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HE Department of Trade and Industry (DTI) said it will develop the country’s shipbuilding industry due to the surge in demand for roll-on, rolloff (Roro) ships.
Trade Secretary Adrian S. Cristobal Jr. said the provision of perks to makers of new vessels under the 20142016 Investment Priorities Plan (IPP) has made the Philippines an “attractive”
INSIDE
MILLIONAIRES! Editor: Jun Lomibao • mirror_sports@yahoo.com.ph
THE Los Angeles Dodgers’s Kershaw Clayton is the highest paid this year at $33 million. AP
NOVAK DJOKOVIC captures his sixth Key Biscayne title and his third in a row, beating Kei Nishikori, 6-3, 6-3, in the Miami Open final. AP
Sports BusinessMirror
Tuesday, April 5, 2016
ANSAS CITY, Montana—There are a record 127 major-league players who will earn $10 million or more this season, according to salary information obtained by USA Today Sports, and no team has fewer players earning at least that much than the defending World Series champions. Yes, the Kansas City Royals. The Royals have a franchise-record $131.5-million opening-day payroll after resigning Alex Gordon and signing free-agent starter Ian Kennedy. Gordon, who received a four-year $72-million contract, is their highest-paid player this year at $12 million. The Royals have only two players on their openingday roster who will earn less than $1 million, but the wealth is spread out throughout their roster, which the Royals believe is a key to their success as a small-market team. There’s no debate the formula is working. The Royals have won the last two American League pennants, and won their first World Series title in 30 years last season. They enter the year with a payroll that’s $63.5 million less than the Detroit Tigers in their own division, and $57.5 million more than the Cleveland Indians, who at $74 million, have the lowest payroll in the America League (AL) Central. “We have to make the budget work,” Royals General Manager Dayton Moore says. “Consequently, we’ve had to spread money out based on what the payroll is on any given year.’’ The average major league salary rose to a record $4.4 million, the second consecutive year it’s exceeded the $4-million mark. There’s no division with a wider top-to-bottom payroll disparity than the National League (NL). The Los Angeles Dodgers slashed their payroll by more than $50 million since the end of last season, but still dominate their divisional brethren. They will pay their opening-day roster $222 million— including 10 players on the disabled list—which is actually a shade lower than the New York Yankees’ $223 million payroll. The Dodgers, however, will pay out at least $18 million more in signing bonuses, salaries and buyouts for players, like Matt Kemp, Bronson Arroyo and Chase Utley, and Cuban signees Yaisel Sierra, Hector Olivera and Erisbel Arruebarrena. The San Francisco Giants ($172 million) are also in the upper middle class in the NL West, while the Arizona Diamondbacks lag well behind the Giants and Dodgers, at $89.2 million. The smallest payroll in baseball belongs to the Tampa Bay Rays at $57 million, though they will pay released first baseman James Loney an additional $9.7 million. Their highest-paid player is Evan Longoria at $12.6 million.
Yet, despite the payroll gap, the Rays are considered to have almost as much a chance to reach the postseason as any team in the AL. The teams with the four highest 2015 openingday payrolls—the Dodgers, Yankees, Detroit Tigers and Boston Red Sox—won a combined two playoff games; the Red Sox and Tigers finished in last. It’s the middle class that dominated the postseason landscape a year ago, with the Chicago Cubs ($160 million) the highest-paid team of the quartet that advanced to the NL and AL Conference Series. Perhaps, the most intriguing aspect of the players earning at least $10 million this year—led by the Red Sox with nine players—are the players being partially paid by other teams to simply go away. The Atlanta Braves are paying $30.125 million in contracts to three players they dumped in the last week with Nick Swisher ($15 million), Michael Bourn ($14 million) and Emilio Bonifacio ($1.25 million); $15 million of that came from the Cleveland Indians after their August trade.
The Texas Rangers are receiving $35 million in financial gifts for outfielder Josh Hamilton ($24 million from the Angels), DH Prince Fielder and ace Cole Hamels ($11 million total from Detroit and Philadelphia, respectively). The Phillies, who have an opening-day payroll of $81 million, are paying out closer to $100 million overall, with $12.5 million going to Cliff Lee’s buyout. They’ll have another $10-million buyout to absorb a year from now when they decline struggling first baseman Ryan Howard’s $23 million option. Two teams were relieved of hefty financial obligations when first baseman Adam LaRoche abruptly retired this spring from the Chicago White Sox, voiding his $13-million contract. The Mets saved $9 million when struggling outfielder Michael Cuddyer retired during the winter. He received a $3.5-million buyout instead of the $12.5 million he was scheduled to receive in 2016, according to salary information obtained by USA Today Sports. The highest-paid player in baseball once again
Roro vessels are used to transport passengers, cargo and vehicles throughout the countrys 7,101 islands. In its manufacturing road map, the DTI has included shipbuilding as among the sectors that need assistance to improve demand. C A
The Marcos Chronicles
will be the Dodgers’ three-time Cy Young winner Clayton Kershaw at $33 million, according to the MLB central office’s calculations, which includes signing bonuses and deferrals. Diamondbacks ace Zack Greinke, Kershaw’s former teammate, will be paid $31.799 million this year as part of his sixyear $206.5-million free-agent contract; his salary comprises 36 percent of the Diamondbacks’s payroll. The only other player to earn more than $30 million this year will be Red Sox ace David Price, who signed a seven-year $217-million contract this winter. Scheduled to crack the $30 million club in future years are Tigers first baseman Miguel Cabrera and Angels center fielder Mike Trout in 2018; Angels first baseman Albert Pujols in 2021; and Marlin right fielder outfielder Giancarlo Stanton in 2023. This, of course, doesn’t include the potential starstudded free agent class of 2018 that includes Bryce Harper, Manny Machado, Jose Fernandez, Matt Harvey and Jason Heyward, all who will be under the age of 30 when they can join the exclusive club.
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Shipbuilding sector’s export revenues in 2012
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MILLIONAIRES! B B N USA Today
site for the shipyard of Japanese firms. “We want to develop the shipbuilding sector to cater to the domestic market for small vessels,” Cristobal told reporters recently.
$1.07B
THE AVERAGE SALARY IN MAJOR LEAGUE BASEBALL RISES 4.4 PERCENT TO $4.38 MILLION ON THE OPENING DAY OF THE 2016 SEASON, WITH THE LOS ANGELES DODGERS TOPPING SPENDING FOR THE THIRD STRAIGHT SEASON.
RECORD-TYING VICTORY KEY BISCAYNE, Florida—When a flyover by a flock of pelicans briefly interrupted Novak Djokovic’s final service game on Sunday, he waved both arms and grinned as if he had just won a championship. The actual celebration began moments later, when Djokovic clinched a record-tying sixth Key Biscayne title and his third in a row, beating Kei Nishikori, 6-3, 6-3, in the Miami Open final. After Nishikori shanked the final shot, Djokovic hopped happily near the net and delivered a leg kick, flying high himself. During the trophy ceremony, he recalled winning Key Biscayne for the first time when he was 19. “I have a very special connection to this tournament,” Djokovic told the crowd. “In 2007 it was the biggest title I had won in my career. It has been a springboard for everything coming after that. I certainly hope that the love affair continues in the years to come.” Djokovic matched Andre Agassi’s record of six men’s titles at Key Biscayne, but then he wins everywhere these days. He’s 28-1 in 2016, with the lone loss coming when he retired during his quarterfinal against Feliciano Lopez in Dubai because of an eye infection. Ranked No. 1, Djokovic earned his 28th Association of Tennis Pro-
fessionals (ATP) Masters title, breaking the record he shared with Rafael Nadal. He swept Indian Wells and the Miami Open for the third year in a row. He also recorded his 714th career victory, surpassing his coach, Boris Becker, and moving into 11th place in the Open era. “That’s the most important fact,” Djokovic said with a laugh. The No. 6-seeded Nishikori lost to Djokovic for the sixth consecutive time and was doomed by an erratic serve. He doublefaulted five times, and Djokovic repeatedly pounced on his second serve to earn five breaks. After several days of sweltering conditions, weather wasn’t an issue, with highs only in the 70s, but Djokovic made sure the match didn’t become an endurance test anyway. He broke in three of his first four return games, dominating rallies in part because Nishikori’s shots lacked the precision of earlier matches. Nishikori required treatment from a trainer on his left thigh late in the second set, but his bigger problem was his opponent. “Hope I can get you next time,” Nishikori told Djokovic during the trophy ceremony. “I hope you don’t,” Djokovic responded. “It’s always tough to play Novak,” Nishi-
kori said later. “I thought I wasn’t playing too bad, but, at the same time, he played great tennis. He was very patient and he didn’t miss.” That was nothing new. Djokovic won all 12 of his sets in the tournament. But he felt he saved his best for last. “The best two matches I played in Indian Wells and Miami were the two finals,” he said. “I’m very pleased with that.” Djokovic earned $1.03 million—the same as women’s champion Victoria Azarenka. After winning Indian Wells two weeks ago, Djokovic caused a stir when he said men should earn more prize money than women because they draw larger crowds. Djokovic overtook Roger Federer as the ATP Tour career leader in prize money with $98.2 million. The Serb flies on Monday to his home in Monte Carlo, where he’ll begin the clay season a week later. He’s a 10-time Grand Slam champion, and the French Open is the only major tournament he has yet to win. “I have lots of motivation for the beginning of the clay court season that ends up hopefully with the crown in Paris,” he said. “But I’m not the only one who wants to win that big trophy.” AP
SPORTS
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MICROSOFT CORP. TO GIVE MORE SOFTWARE TO PHIL NONPROFITS E2
B R R R, Correspondent
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THIS March 31 photo shows PeaceTech founder Robin Pettyfer talking about the group’s case study during a forum organized by Microsoft Corp. in Makati City.
MICROSOFT CORP. TO GIVE MORE SOFTWARE TO PHL NONPROFITS S O S | Correspondent
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ICROSOFT Corp., through its Philippine office, will donate more software to local nonprofit groups this year to help them get empowered with technologies as the challenges they face grow. Microsoft will provide recipients with Windows and Office suites through TechSoup Global’s Asia Pacific network, Raul R. Cortez, Microsoft Philippines legal and corporate affairs director, said at the sideline of the American multinational technolog y company’s forum on March 31. TechSoup Global is an international network of 62 partnernonprofit groups and non-governmental organizations in Africa, the Americas, Asia Pacific, Europe and the Middle East. Since 1987,
it has leveraged technology to build the capacity of these groups toward solving problems in local communities and fostering global social change. Cloud services in cloud computing is also offered, Cortez added. According to him, the Microsoft technology provides local nonprofit groups with “productivity and collaboration tools.” It will facilitate them in “streamlining their process,” reaching out to a greater number of people as a result.
“Nonprofits in the Philippines are truly unsung heroes with their desire to instigate social change throughout the country by offering services they would not come in contact with otherwise,” Microsoft Philippines Managing Director Karrie Ilagan was quoted as saying in a March 31 statement. Local nonprofits have the “potential for great impact on communities they operate,” she added. They, however, face “great challenges” and are “stretched to their limits and challenged to do more with less to serve their communities and advance their mission.” Through its country office in the Philippines, the 41-year-old company will host sessions in April and trainings in May this year to provide nonprofits with information, resources required to empower their organizations w ith Microsof t technolog ies, Ilagan said. Microsoft has donated software to over 240 nonprofit organizations amounting to $10.9 million, the statement said. That amount is nearly 12
percent of the company’s revenue last year of $93.58 billion. The company does not set any limit to the number or amount of software donation for a particular year, as well as to the number of local recipients, according to Cortez. “It’s a matter of the organizations qualifying under the TechSoup [requirements],” he added. Once the organizations are accredited “they can get hold of the software [package].” The maximum number of software donations for every nonprofit is “51 licenses for each software,” according to Cortez. He added the company has over 240 beneficiaries in the Philippines. The recipients focus on education for peace, battered women, abused children and agriculture, among other social concerns. “They can avail [themselves] the latest technologies from Microsoft,” Cortez said. “It’s our goal to make them as productive as they can, make them realize their full potential. Technology is the tool to achieve their purpose.”
INDONESIAN ONLINE GROCER MARKS 1ST YEAR WITH 0.3M CUSTOMERS
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T Icart Group Indonesia, operator of the HappyFresh application, marked its first year with 300,000 customers and a network of retailers in six cities. While the limited liability has already included Manila in its network, it has yet to say which store or stores in the Philippines capital it is working with. The company said in a statement its network is composed of over a thousand stores—Jakarta, Surabaya, Bandung, Kuala Lumpur, Bangkok and Taipei. The Jakarta, Indonesia-headquartered firm said it invested heavily within 12 months “in a high-performing logistics network consisting of in-house trained personal shoppers and delivery drivers.” Icart Group said it has partnered its app with top supermarket retailers, as well as popular independent stores such as Grand Lucky, Ranch Market, Farmers Market, Lotte Mart & Super Indo (Indonesia); Jason’s Food Hall and Village Grocer (Malaysia); Big C, Gourmet Market, Home Fresh Market (Thailand); and Simple Mart, Lafe and Cotton Land (Taiwan). The company didn’t cite its partner stores in the Philippines. Last year the Icart Group was able to complete a $12-million Series-A funding led by Vertex Venture, the venture arm of Temasek Holdings, and Sinar Mas Digital Ventures, the venture arm of Sinar Mas Group of Indonesia. Rizal Raoul Reyes
LTHOUGH it has gained popularity nowadays as one of the newest methods for news gathering, an academician and a journalist are lukewarm in using crowdsourcing as a method for reportorial purposes. In an e-mail interview with the BusinessMirror, Associate Professor Rachel E. Khan said crowdsourcing is convenient but not the best tool for news gathering. Khan, who teaches at the journalism department of the University of the Philippines’s College of Mass Communications, added crowdsourcing is only relevant when a journalist wants to pursue leads and clues in a story. Nevertheless, Khan said crowdsourcing should be disregarded if a report requires a credible view or opinion. “If the story is in need of an expert opinion, then the journalists should go after the ‘expert’ in the traditional manner of reporting,” Khan said. “For one thing, how will you determine the credibility of the source? How do you separate the legitimate source from the trolls?” A Reuters report cited Jeff Howe as having coined the term in the June 2006 issue of Wired magazine. According to Reuters, Howe defined crowdsourcing as “the act of taking a job traditionally performed by employees and outsourcing it to an undefined, generally large group of people in the form of an open call.” While Howe cited the cost-benefits as companies “discover ways to tap the latent talent of the crowd,” US-based Filipina writer Ninotchka Rosca is not that sold to the idea. Rosca said crowdsourcing has even contributed decline in quality of news coverage, especially in social media. Furthermore, she said crowdsourcing had led to the
generalization of coverages. “It has broken down specialization of news gathering, leading to a lack of quality,” Rosca said in a forum at Kamuning Bakery in Quezon City. However, Khan said it is not fair to blame social media as the culprit for the perceived shallow thinking of some millennials. “Seriously, to blame only one factor [i.e., social media] for shallow thinking is shallow thinking!” Khan said. “Millennials are [deemed] shallow because of several factors, including the declining quality of elementary and highschool education; the fact that they grew up with television or video games as their babysitters.” K han, nonetheless, blamed Filipinos’ aversion to reading as a factor. “Filipinos, in general, are not readers and therefore, are not deep thinkers,” she said. “A person who grew up with a fondness for books [and consequently, abstract thinking], will be able to use social media as an aggregator of information [both useful and useless] rather than as a deterrent to knowledge.” As far as the quality of blogs is concerned, Khan said it will be the readers who will determine if a blog has quality and substance. Khan, meanwhile, said bloggers need to address the bigger issues in blogging,such as unethical practices in blogging, “ranging from plagiarism to paid propaganda” disguised as “unpaid for” opinion or news.” She also urged news sources to be media savvy to determine if the blogger should be given the proper recognition. For the blogger, Khan advises he or she must develop a significant following to gain credibility from the professional media. Khan also advised bloggers to develop an instinct of an investigative journalist so they can break into the mainstream media.
CONSUMERS SUPPLEMENT TRADITIONAL TV WITH VIDEO-ON-DEMAND–NIELSEN
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ITH the rise of video-on-demand platforms where consumers have the power to select, watch or listen to video content whenever they want, broadcast TV still reigns supreme in the Philippines, the Nielsen Co. said on April 1. A new report from Nielsen revealed that 59 percent of online Filipino consumers are subscribed to a cable provider and at the same time, 16 percent are subscribed to an online service provider. According to Nielsen, its Video-on-Demand (VOD) survey revealed that 81 percent of Filipino respondents subscribed to an online service provider claim they watch some form of VOD programming. This includes long- and short-form content, be it through TV, computer, tablet or a mobile phone. “The emergence of [VOD] programming options is giving consumers greater control over what, when and how they watch content,” Nielsen Philippines Managing Director Stuart Jamieson was quoted in a statement as saying. “Viewers are now expanding their range of viewing platforms, as well as the amount of media they’re consuming. We are seeing that online is supplementing traditional services.” In addition, 45 percent of online Filipino consumers watch VOD once a day or more often. When they access VOD, movies dominate the type of VOD content watched by Filipinos. In fact, close to nine in 10 (89 percent) Filipinos say they view movies, followed by TV programs (60 percent) and other genres, such as comedies (52 percent), documentaries (44 percent), reality shows (40 percent), news shows (38 percent) and dramas (35 percent). Filipino consumers predominantly use computers (80 percent) and mobile phones (76 percent) to watch VOD programming. The Nielsen Global VOD Survey polled over 30,000 online respondents in 61 countries to gauge worldwide sentiment about VOD viewing and advertising methods. The number of selfreported VOD viewers is significant.
percent of online Filipino consumers said they can view VOD at a time that is most convenient for them. Eighty-two percent of online Filipino consumers said they like to catch up on multiple episodes at one time. “We see that VOD is complementing TV by filling the gaps that come with traditional TV viewing,” Jamieson said. “When Filipinos can’t get to their TV at a certain time, they now know that they have the ability to watch it at a later date that allows them to catch up.” Filipino consumers are also showing great propensity to be on social media while watching VOD, with 74 percent saying they like to use social media while watching VOD programming.
Cutting through the ad clutter
AROUND three quarters (74 percent) of online Filipino consumers wish they could only see ads that are for products that interest them, the Nielsen survey revealed. On one hand, close to 7 in 10 (69 percent) of Filipino consumers who watch VOD say online ads displayed before, during or after VOD programming are distracting and, 62 percent wish they could block ads. On the other hand, 63 percent of Filipino respondents who watch VOD somewhat or strongly agree that ads in VOD content give them good ideas for new products to try. Around two thirds (66 percent) say they don’t mind getting ads if they can watch free content. This sentiment is highest among Southeast Asian consumers. “Consumers can be open to advertisements but this has limits,” Jamieson said. “To engage and keep the attention of consumers, it is critical for advertisers and content providers to customize both content and advertising.” Jamieson added that innovations such as programmatic and addressable advertising “give the needed precision in reaching viewers.” However, Jamieson issued a caution. “Mass advertising via traditional TV is still compelling and effective in capturing the attention of audiences and should not be disregarded,” he said. “It is always important to consider that traditional and digital models serve different purposes.” Rizal Raoul Reyes
DIGITAL
VOD’s appeal to consumers THIS photo, courtesy of PT Icart Group Indonesia, shows a company employee acting as a personal shopper.
GIVEN the fast-paced lifestyle of today’s consumers, convenience is an important consideration. The survey revealed that 85
INFLATION SEEN TO HOVER BELOW GOVT Q1 TARGET
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HE g row th of consumer prices is set to still hover below the government’s target at the end of the first quarter, but monetary authorities will not likely react with policies to spur inflation upward. In a com ment a r y re leased on Monday, Singaporebased DBS Bank Ltd. economist Gundy Cahyadi said inflation may have risen slightly in March to 1.1 percent, but is still below the target band of the central bank at 2 percent to 4 percent. Inf l ation in Febr uar y slumped back to below 1 percent to hit 0.9 percent. Inflation has been below annual target band for 10 months. In 2015 the Bangko Sentral ng Pilipinas was unable to keep inflation within its target band to hit 1.4 percent on average for the year. This was blamed to tame food prices and extraordinarily low oil prices during the period. Base effects were also said to be at play during the year. Despite this, the central bank will not tweak its policies to push inflation upward, the economist said. “We still see no reason that the BSP may react to
1.1% Inflation rate in March according to Singaporebased DBS Bank Ltd. economist Gundy Cahyadi
short-term changes in inflation,” Cahyadi said. “CPI inflation is currently trending well below the 2-percent to 4-percent target but the BSP has continued to stress its cautious approach.” However, Cahyadi said “even if food inf lation is c u r rent ly sof t—below 2 percent,” he sees persisting “uncertainties about food prices.” “Additionally, risks persist for inflation to tick higher again going forward should there be an upward swing in oil price.” The BSP Monetary Board held its second monetarypolicy meeting of the year during the Holy Week, again keeping its ammo at bay by maintaining its current monetary-policy stance. S “I,” A
Leak exposes how wealthy, powerful hide their money
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BusinessMirror EXPERTS TEPID TO CROWDSOURCING AS NEWS GATHERING TOOL IN PHL
Tuesday, April 5, 2016
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CHILDREN play on the grounds of the Cultural Center of the Philippines (CCP) in Pasay City. The CCP is one of the institutions established by Imelda R. Marcos that has survived the ouster of her husband and late President Ferdinand Marcos in 1986. The others are the Philippine Children’s Medical Center, the National Kidney and Transplant Institute and the Philippine Heart Center. NONIE REYES
B P R-M Special to the BusinessMirror
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Second of three parts
ROM Cory to Noynoy—Much of the programs and projects of the late President Ferdinand Edralin Marcos and former First Lady Imelda Romualdez Marcos survived the strongman’s ouster 30 years ago. Not all laws and presidential decrees created in the years of martial rule were repealed; not all Marcos-created agencies were essentially abolished. In Diliman, Quezon City, a long and wide conference table, with accompanying wooden chairs, dominates an otherwise sparsely decorated but spotlessly clean C A
PESO EXCHANGE RATES n US 46.0650
The minority party, whichever it is, should be represented in the Philippine Charity Sweepstakes Office board of directors, to prevent undue partisanship in the Sweepstakes doles.”—Sen. B A J.
MASSIVE leak of documents has blown open a window on the vast, murky world of shell companies, providing an extraordinary look at how the wealthy and powerful conceal their money. See related stories on A9 and B4. Twelve current and former world leaders maintain offshore shell companies. Close friends of Russian leader Vladimir Putin have funneled as much as $2 billion through banks and offshore companies. Those exposed in the leak include the prime ministers of Iceland and Pakistan, an alleged bagman for Syrian President, Bashar al-Assad, a close friend of Mexican President Enrique Pena Nieto and companies linked to the family of Chinese President Xi Jinping. Add to those the monarchs of Saudi Arabia and Morocco; Middle Eastern royalty; leaders of Fifa, the international body that controls international soccer; and 29 billionaires included in Forbes magazine’s list of the world’s 500 richest people. Also mentioned are 61 relatives and associates of current country leaders, and 128 current or former politicians and public officials. The leak exposes a trail of dark money flowing through the global financial system, stripping national treasuries of tax revenue. The data breach occurred at a little-known but powerful Panamanian law firm, Mossack Fonseca & Co., which has an office in Las Vegas, a representative in Miami and presence in more than 35 other places around the world. The firm is one of the world’s top 5 creators of shell companies, which can have legitimate business uses but can also be used to dodge taxes and launder money. More than 11.5 million e-mails, financial spreadsheets, client records, passports and corporate registries were obtained in the leak, which was delivered to the Suddeutsche Zeitung newspaper in Munich, Germany. C A
n JAPAN 0.4129 n UK 65.5182 n HK 5.9413 n CHINA 7.1430 n SINGAPORE 34.1146 n AUSTRALIA 35.3503 n EU 52.5049 n SAUDI ARABIA 12.2833
Source: BSP (4 April 2016 )
A2 Tuesday, April 5, 2016
BMReports BusinessMirror
The Marcos Chronicles and spacious receiving room at the second floor of the Philippine Children’s Medical Center (PCMC). Pointing to the conference table, Dr. Julius A. Lecciones, PCMC executive director and current country coordinator of My Child Matters Philippines, said: “Lamesa pa ito ni Imelda ha. Actually this [receiving] room ay pahingahan ni Imelda noon. Andyan pa ’yung kama niya [This (conference) table was used by Imelda. This entire room used to be where Imelda rested. Her bed is still here].”
Heart and kidney
LECCIONES reiterated that PCMC highly relies on the subsidy of the government because of their many charity patients. “We could reduce our charity beds, but that would be going against our Charter,” Lecciones said. “The bed allocation of the National Kidney and Transplant Institute [NKTI] and the Philippine Heart Center [PHC] is 90-percent paying patients and 10-percent charity patients. Ayaw nilang aminin [They do not want to admit it] but that’s the truth. Ang Department of Health [DOH], pinuna na sila [has called their attention]. Because if that is your mix, then you are operating like a private hospital.” Via the BIR Road, the PCMC is only eight minutes away by land travel from the PHC, a treatment and research center dedicated to heart and allied diseases. It was created by the Marcos administration in 1975, three years after the declaration of martial law, at an initial appropriation of P10 million to cover maintenance and operation expenses.
Like the PCMC, the presidential decree that created the PHC carried a pro-poor provision. Section 4, No. 8 of PHC’s purposes and objectives states: To extend medical and cardiological services to the general public, to help prevent, relieve or alleviate the innumerable cardiovascular afflictions and maladies of the people, especially the poor and less fortunate in life, without regard to race, creed, color or political belief. Service for the poor, however, was no longer present in Presidential Decree 1832, which created on January 16, 1981, the NKTI, then known as the National Kidney Foundation. Lecciones revealed that the 3.7-hectare lot, where the PCMC stands, is owned by the National Housing Authority (NHA)—an attached agency of the First Lady’s Ministry of Human Settlements (MHS) that was later transferred in 1986 to the Housing and Urban Development Coordinating Council (HUDCC) under the Office of the President, after the MHS was abolished. “We wanted the government to donate the land, but the NHA did not agree. Congress then gave money so we [PCMC] can pay NHA almost a billion pesos for the land. And we got another P600 million for 150 additional service [charity]patient beds,” Lecciones said.
Super charity agency
ON January 17, 1973, less than a year after the declaration of martial law, the 1935 Constitution was replaced by the 1973 Constitution, in accordance with Presidential Proclamation 1102 issued by thenPresident Ferdinand E. Marcos. The
form of government in the Philippines shifted from presidential to parliamentary. An Interim Batasang Pambansa (National Assembly) replaced Congress five years later, with Marcos remaining as President. The shift in form of government resulted in changes that rippled through various government agencies, including the Philippine Charity Sweepstakes Office (PCSO). Today much of what is contained in the existing PCSO Charter is the result of executive and legislative efforts committed in the name of the agency during the years when the Philippines was under martial law. B at a s Pa mba n sa ( BP) 42, enacted on September 24, 1979, brought extensive and far-reaching amendments to the PCSO Charter (Republic Act [RA] 1169), which was passed during the administration of President Ramon Magsaysay on June 18, 1954.
Marcos overhaul
On September 24, 1979, a major overhaul of the PCSO charter took effect on the strength of BP 42. The law instituted sweeping amendments to RA 1169, transforming the PCSO into a virtual super revenue-generating charity agency. BP 42 carried three major amendments. The first pertained to the nature of the charity agency (Section 1), the second referred to the apportionments of PCSO revenues (Section 6) and the third covered the powers and functions of its Board of Directors (Section 9). Section 1 of BP 42 expanded to a great degree the corporate character of the PCSO. Prior to BP 42,
www.businessmirror.com.ph
C the charity institution’s revenue generating efforts solely involved the holding of sweepstakes races and lotteries. But under Section 1 of BP 42, the PCSO is allowed to “engage in healthand welfare-related investments, programs, projects and activities, which may be profit-oriented.” The only limitation to this provision is that “such investments will not compete with the private sector in areas where investments are adequate, as may be determined by the National Economic and Development Authority [Neda].” The PCSO can, likewise, “undertake any other activity that will enhance its funds-generation operations and funds-management capabilities,” for as long as this activity does not compete with the private sector in areas, where the Neda has declared that investments are already adequate. All profit-oriented and healthrelated investments, programs, projects and activities were “subject to the approval of the Minister of Human Settlements.” In addition, Section 1 of BP 42 scrapped the need for the consent of the Commission on Appointments for all of the president’s board of director appointees to the PCSO. In effect, the president had sole power in determining board appointments, as well as in fixing the compensation and term of office of all members of the PCSO board. BP 42 adjusted PCSO allocations accruing from sweepstakes net receipts. It enlarged operating expenses (from 10 percent to 15 percent) and raised funds for charity from 25 percent to 30 percent,
while removing the 6.5-percent allocation for provinces and cities that were previously used to maintain provincial, city and municipal hospitals. Unclaimed prizes were considered forfeited after a period of one year and made part of the charity fund. In consultation with the MHS, the board of directors decided on the utilization of the charity fund, with the approval of the Office of the President. The PCSO board has the power to apply part of the contributions to the charity fund to approved investments, but in no case shall funds for investments exceed 10 percent of the net receipts from the sale of sweepstakes tickets in any given year. BP 42 broadened the powers and functions of the PCSO board of directors to include the capability to “contract loans, credits and indebtedness, whether domestic or foreign, on such terms and conditions as it may deem appropriate for the accomplishment of its purposes, subject to applicable laws, rules and regulations.” Under Section 9 of RA 1169, “the PCSO is only authorized to hold lotteries once a month during the months when there are no sweepstakes draws and races.” BP 42 repealed this specific provision and placed the determination of the frequency and manner of lotteries and other similar activities at the discretion of the PCSO Board.
Marcos to Cory
THE late President Corazon Aquino, and all presidents that came after her, ran the PCSO according to the
policies, rules and regulations that, for the most part, were put in effect during the Marcos dictatorship. From the eigth (1987) to the 16th Congress (2016), a timeline of 29 years after democracy was deemed returned to the country by way of the 1986 Edsa People Power, no law or presidential decree pertaining to the PCSO—that was crafted or passed during the Marcos years— was repealed or amended. To this day, the charity agency’s charter states that the board’s disbursement of PCSO charity fund for priority programs, needs and requirements in specific communities shall be made “in consultation with the MHS,” more than 30 years after the MHS has ceased to exist. The charter, likewise, still states the power of the MHS to approve all profit-oriented and health-related investments, programs, projects and activities. In his April 1968 privilege speech at the Senate, the late Sen. Benigno Aquino Jr. saw the urgent need to reform the PCSO and recommended concrete measures for these reforms to be achieved. One of the most relevant reform proposals the elder Aquino put forward was the representation of the minority political party in the PCSO board of directors. “The minority party, whichever it is, should be represented in the PCSO board of directors to prevent undue partisanship in the sweepstakes doles,” Aquino said. It is a recommendation that no president—not even Aquino’s wife, the late President Corazon Aquino, nor his only son President Benigno S. Aquino III—had moved to implement. To be concluded
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DA awaits release of additional ₧2.11-B budget from DBM for El Niño mitigation
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HE Department of Agriculture (DA) on Monday said it has yet to receive the P2.11-billion supplemental budget it requested from the Department of Budget and Management (DBM) for the implementation of its El Niño mitigation plan.
But even without the additional budget, Agriculture Undersecretary Emerson Palad said the DA is ready to put in place additional measures to help farmers cope with the ill effects of El Niño. Palad also said that, prior to the protest and dispersal of farmers in Kidapawan City, North Cotabato,
last week, the DA has provided assistance to them. The farmers had asked the government to give them 15,000 sacks of rice and free planting materials after the drought devastated their crops. “Agriculture Secretary Proceso J. Alcala, together with the local government unit [LGU], has
visited North Cotabato twice. He directly distributed farm interventions to the local farmers prior to the incident,” he said in a news briefing on Monday. Earlier, the DA said Alcala has turned over more than P2.4 billion worth of projects to farmers’ groups and LGUs during his visit in Alabel, Sarangani and Kidapawan City, North Cotabato, in February. Aside from production support, Palad said the DA also provides irrigation support, such as cloud seeding and rehabilitation of small water-impounding projects, and distributes information material regarding El Niño. He said a total of P3.64 billion worth of farm interventions have already been given by the DA to help farmers. Palad added that this budget came from the regular DA fund. In the meantime, Palad said the DA will tap its quick-response fund (QRF) for areas under state
of calamity because of El Niño. Of the P57 million QRF allocated for El Niño mitigation, Palad said P9.6 million was given to Region 9; P16.15 million for Region 12 (which covers North Cotabato); and P31.7 million for the Autonomous Region in Muslim Mindanao. Despite saying that the DA has already provided production support to the farmers of North Cotabato, Palad refused to comment on the probable reasons the farmers of Kidapawan City staged a protest rally. He also said the DA can only give production support to the farmers, and not food assistance. “The DA’s mandate is to help farmers produce rice, but we cannot provide food assistance. I think even the National Food Authority can’t give rice,” Palad said. For their part, senators said they will ask Budget Secretary Florencio Abad to explain the reported nonrelease in March of
P900-million assistance to farmers that is part of the total P19billion allotted by the government for El Niño-affected farm sectors. Sen. Serge Osmeña indicated Abad will “very likely” be asked about it when the DBM chief is summoned at the upcoming hearings of a separate Senate inquiry into the killing of rallying farmers who blocked a major highway in Mindanao to protest government inaction to cushion the economic impact of El Niño. “The Senate will definitely look
into that massacre,” Osmeña told the BusinessMirror. Sen. Aquilino Pimentel III confirmed in a separate text message that he, too, is demanding an explanation from authorities concerned. Among others, senators are keen to know from Aquino administration officials if the timely release of the already approved P900-million assistance to farmers could have averted the bloody confrontation between protesting farmers and police authorities in the El-Niño-affected region.
The DA’s mandate is to help farmers produce rice, but we cannot provide food assistance. I think even the National Food Authority can’t give rice.” —P
PHL wants own shipyards to meet domestic demand C
The low domestic demand for ships can be attributed to the preference of most ship operators to import second-hand vessels from Japan and South Korea, as well as lax provisions in Philippine laws governing vessel retirement. “We had to be strict under the 2014-2016 IPP as we want to upgrade our logistics and transportation vehicles. So, under the IPP, it’s all new vessels, and we’ve had new applications for Roros from Japan,” Cristobal said. Previous editions of the IPP allowed perks to be given to ship operators outfitting and importing second-hand vessels. Cristobal said the shipbuilding sector should be “upgraded” as the Philippines is among the top 5 largest shipbuilding countries in the world in terms of gross tonnage.
The development of the shipbuilding sector, the DTI said, would also benefit other industries, such as food manufacturing, tourism, and oil and steel factories. The sector employs some 45,000 skilled and semi-skilled Filipinos. The DTI said the sector’s export revenues have reached $1.07 billion in 2012, equivalent to 0.7 percent of the country’s GDP. Currently, the Philippines hosts the shipyard of Hanjin Heavy Industries, South Korea’s largest shipbuilding firm. The company employs some 25,000 workers. Japan’s Tsuneishi Heavy Industries has its second largest shipyard in the world in Cebu. To fast-track the development of the sector, the DTI said the country needs investments in manufacturing parts and components as materials used for making ships are imported.
DROUGHT-RESISTANT A farmer brings his cow to the cornfields in Santa Lucia, Ilocos Sur. Corn and tobacco are the preferred crops in this town because they are drought-resistant. MAU VICTA
Oil drops as Saudis said it will freeze output only if Iran joins
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WOOD ARTISANS Workers assemble a sofa in this family-owned furniture shop along
Commonwealth Avenue in Quezon City. The designs are inspired by the woodcarvings of Pampanga craftsmen. ALYSA SALEN
IL extended declines after Saudi Arabia’s deputy crown prince said the kingdom will only freeze output if Iran follows suit, putting in doubt the success of a proposed deal between major producers. Futures declined as much as 1.6 percent in New York after a 4-percent drop on Friday. Saudi Arabia’s Mohammed bin Salman signaled in an interview with Bloomberg that if any country raises output, his nation will also boost sales. With producers scheduled to meet this month to discuss a pact on capping supplies, Iran’s oil minister said he’ll attend the gathering if he finds the time. Russian oil production set a post-Soviet high in March. Oi l c limbed 14 percent in March after rebounding from a 12-year low this year, amid speculation a global glut will ease as US output falls. While Saudi Arabia, Russia, Venezuela and Qatar in February first proposed an accord to cap production to reduce the worldwide surplus and boost prices, Iran has said it plans to increase sales after international sanctions were removed following a deal to curb the Persian Gulf state’s nuclear program. “Salman’s comment seems to be a warning to anyone looking to take advantage of an output freeze without having to cut production,” Hong Sung Ki, a commodities analyst at Samsung Futures Inc., said by phone from Seoul. “Russia’s output boost can be seen as a strategic move as it tries to increase production as much as it can before any
potential output freeze kicks in.” West Texas Intermediate for May delivery dropped as much as 58 cents to $36.21 a barrel on the New York Mercantile Exchange, and traded at $36.28 at 9:13 a.m. Singapore time. The contract fell $1.55 to $36.79 on Friday. Total volume traded was about 40 percent above the 100-day average. Brent for June settlement lost as much as 1.2 percent to $38.21 a barrel on the London-based ICE Futures Europe exchange. The contract fell $1.66, or 4.1 percent, to $38.67 on Friday. The global benchmark crude traded at a 54-cent premium to WTI for June delivery. Money managers lost faith in oil’s recent rally as doubts grew over whether major producers will be able to agree on an output freeze. Futures in West Texas Intermediate (WTI) oil retreated last week for the first time since midFebruary. Prices had surged from a low of almost 13 years on a proposal by Saudi Arabia, Russia, Venezuela and Qatar to cap oil output and reduce a global surplus. They’ll meet with other countries in Doha on April 17. While Iran said it would attend the talks, it ruled out limiting supply as it restores exports after sanctions were lifted in January. Then Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said in an interview with Bloomberg that his country will freeze its output only if Iran and other major producers do as well. That pushed WTI down another 4 percent. “Doubts were growing about
the meeting before the Saudi comments,” said Mike Wittner, head of oil markets at Société Générale SA in New York. “People who follow this were coming around to the position that even if an agreement could be reached to freeze output without Iran, it wouldn’t amount to anything.” Short positions on WTI crude, or bets that prices will fall, rose the most since November in the week ended March 29, according to US Commodity Futures Trading Commission (CFTC). The liquidation of shorts during the prior seven weeks was the largest on record.
Iranian blueprint
IRAN plans to boost crude output to 4 million barrels a day, the highest level since 2008, before it will consider joining other suppliers in seeking ways to rebalance the global oil market, Oil Minister Bijan Zanganeh said last month. Iranian output rose by 100,000 barrels a day to 3.2 million in March, the most since May 2012, according to a Bloomberg survey. “It’s not clear what they have to talk about,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “I don’t even know why they want to gather in a room to talk if the Saudis say they won’t freeze output unless Iran does, and we know the Iranians have no intention of cooperating.” W T I oi l for M ay de l iver y dropped 7.6 percent to $38.28 a barrel in the report week on the New York Mercantile Exchange (Nymex) and lost 43 cents, or 1.2
percent, to $36.36 at 12:21 p.m. Singapore time on Monday.
More shorts
BEARISH bets rose by 11,167 contracts, or 17 percent, to 75,598 positions in the report week, the CFTC data show. Short positions were at a nine-month low the prior week. Bullish wagers decreased by 3,647 to 296,614. The resulting net-long position slipped 6.3 percent to 221,016. “We switched to a moderate flow of selling by money managers,” Evans said. “It was dominated by new shorts coming into the market and not by long liquidation. The rise in shorts may reflect that they think the rally is done.” In other markets, net bearish wagers on US ultra-low sulfur diesel climbed by 4,073 contracts to 16,708 in the week ended March 29, CFTC data show. Diesel futures dropped 7.7 percent in the period. Net bullish bets on gasoline traded on the Nymex increased 2,547 contracts as futures declined 2.9 percent. Technical factors may add strength to the rout in coming weeks, said Brian LaRose, technical strategist for broker United-ICAP in Jersey City, New Jersey. Falling below $36.50 would signal a further downtown using the Elliot Wave theory, LaRose said. WTI is approaching the 100-day moving average that stood at $35.82 on April 1. “A close below $36.50 in WTI would signal that some sort of top is in,” LaRose said. “The technical picture is very heavy here.” Bloomberg News
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A third of Pinoy youth had premarital sex
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VER a third of Filipinos aged 15 to 24 have engaged in premarital sex (PMS), and a majority of them do not use any form of protection, according to data collated by the Philippine Statistics Authority (PSA).
Data showed that 35.5 percent of young male Filipinos and 28.7 percent of young females have engaged in PMS. Some 83.8 percent of young women and 73.4 percent of young men did not use any form of protection during their first PMS. This may be the reason 11 percent
of the surveyed Filipino females 15 to 19 years old are already either mothers or 13.6 percent have begun childbearing. Further, some 2.6 percent were pregnant with their first child at the time of the data collection. Meanwhile, PSA data showed that apart from PMS and childbear-
ing, young Filipinos have also been exposed to pornographic materials, such as movies and videos, which they access through mobile devices or the Internet. Around 43.1 percent of young males have read pornographic materials. Only 28.4 percent of young women have accessed pornographic materials. The majority, or 75.8 percent, of young men watched pornographic movies and/or videos while, among women, it is much lower at 38.1 percent. Nearly a third of young men, or 26.4 percent, visit sexually explicit web sites, while only 5.1 percent of young women visit these web sites. Watching sex videos is also common among young Filipinos, particularly among males. Over a third, or 34.5 percent, of
35.5% and 28.7% Percentage of male and female Filipinos aged 15 to 24, respectively, that engage in premarital sex
young men said they have sent or received sex videos through their cell phones or the Internet. This practice is less common among young women, since only 10.6 percent of them engaged in this activity. This is despite data showing that the majority of 15 to 24 year olds own a cell phone and more than half of them use the Internet. Around 81 percent of young women and 76 percent of their male
counterparts have mobile phones. In terms of Internet use, around 61 percent of young women use the Internet, while among young men, the percentage is lower at 57 percent. More than half of young women have e-mail accounts and socialnetworking accounts at 55 percent and 56 percent, respectively. The percentage is much lower among men, with only 49 percent having an e-mail account and 50 percent having a social-networking account. Further, only 2 percent of young women and men have personal blogs. The youth have many online friends, but admitted they have not met some of them personally. The percentage of young men who said they have online friends that they have not met face-to-face is higher at 32.7 percent than women
at 28.8 percent. The same pattern is observed in having textmates that they have not met personally. Young men are more prone to this behavior, with 41.2 percent of them having textmates that they have not met. This incidence is lower among women at 27.4 percent. The PSA obtained the data from the 2013 Young Adult Fertility and Sexuality (YAFS) Study. It is a series of national surveys on the Filipino youth, conducted since 1982 by the University of the Philippines Population Institute and the Demographic Research and Development Foundation. It gathers data from Filipino youth aged 15 to 24. It is one of the sources of information on sexual and nonsexual risk behaviors and their determinants in the country.
Davao City hikes 2016 investment goal B M T. C
Mindanao Bureau Chief
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AVAO CITY—This city has upgraded its investment target to P20 billion with the expected construction of a P10billion bulk-water project following the signing of an agreement between the Davao City Water District and Apo Agua Infrustura Inc. But it is not the agreement yet that was factored into this year’s revenue, but the investment in construction of the bulk-water facility in a remote northern river barangay here, according to Ivan C. Cortes, chief of the city Investment Promotion Center. He said that the Aboitiz-owned Apo Agua Infrustura Inc. would spend as much as P11 billion for the construction expected this year. The investment target this year is actually only half of the revenues earned last year, reaching P40 billion. Cortes said this was due to the single investment poured by another Aboitiz-owned coal plant in Toril District west of here, which invested
₧20B+ The new investment target for Davao City in 2016
P39 billion. The coal plant is being managed by the Aboitiz subsidiary, Therma South Inc. and has a current operation capacity of 300 megawatts, with a plan to double its capacity. Cortes said that a steel plant, the third to operate here, was also slated to construct its facility at the industrial zone in the Tibungco-Bunawan area with a total worth reaching P1 billion. The two other steel plants also operate in Barangay Bunawan, 23 kilometers north of here. Property development remained on top of the investment portfolio of the city, with projects in the pipeline already prepared “as soon as the ongoing projects get finished.” “Most of the property projects are subdivisions constructed both in
the north and south sectors of the city,” he added. Tourism and the information-technology (IT) sectors were the other top performers in income-generation for the city, with a Philippine Statistics Authority study showing that the IT sector alone brought in an annual P5.6 billion to the economy in salaries of its 33,000 employees and workers If the 200-hectare reclamation project along the coastal area near downtown were to proceed later this year, total investments may shoot up much higher, he said. The P39-billion reclamation project is being proposed by a consortium of companies with port operations in Manila. Cortes said that the city only recently came out with implementing rules and regulations of the city’s Executive Order 146, which allows for the project to be undertaken for the city. The project would then be submitted to the Philippine Reclamation Authority, which, in turn, would be subject again for another round of Swiss Challenge, a form of public bidding for big-ticket projects.
BLOODY PROTEST Police clear the highway off of blood and debris following a violent protest along a national highway in Kidapawan City on Friday. Officials say at least two people have been killed and dozens wounded when gunfire erupted as police attempted to clear a four-day-old protest by farmers, who have been demanding government financial aid in the wake of a seven-month drought in the province. A journalist at the site counted 13 injured protesters. AP
Leak exposes how wealthy, powerful hide their money We know [of] upward to $6 billion to $10 billion a year laundered through the US.”—FBI
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In turn, the newspaper shared the data with the Washingtonbased International Consortium of Investigative Journalists. Several McClatchy journalists joined more than 370 journalists from 78 countries in the largest media collaboration ever undertaken after a leak. The reporters worked under the umbrella of the nonprofit International Consortium for Investigative Journalists (ICIJ). The document archive contains 2.6 terabytes of data. As a registered agent, the Mossack Fonseca law firm incorporates companies in tax havens worldwide for a fee. It has avoided close scrutiny from US law-enforcement officials. Mossack Fonseca denied all accusations of illegal activity. “We have not once in nearly 40 years of operation been charged with criminal wrongdoing,” Spokesman Carlos Sousa said. “We’re proud of the work we do, notwithstanding recent and willful attempts by some to mischaracterize it.” The law firm’s cofounder, Ramon Fonseca, in an interview last month on Panamanian television, said blaming Mossack Fonseca for what people do with their companies would be like blaming an automaker “for an accident or if the car was used in a robbery.” Yet, plenty of criminals are named in the documents, like drug traffickers and convicted fraudsters. “The offshore world is the parallel universe of the ultrarich and ultra-
CASINO junket operator Kim Sin Wong on Monday returned P38.28 million to the Anti-Money Laundering Council (AMLC). The money was the second installment he surrendered following the $4.63 million he returned to AMLC earlier this month. JASON ARLAN RAVAL
powerful,” said Jack Blum, a whitecollar crime attorney and an architect of the Foreign Corrupt Practices Act. The archive, which dates to the late 1970s and extends through December 2015, reveals that 14,000 intermediaries and middlemen bring business to Mossack Fonseca. No part of the world is untouched, including the United States. States, such as Delaware, Nevada and Wyoming, register thousands of corpora-
tions annually, often without identifying the true owners. Some of the billions of dollars moving through the domestic economy come from anonymous foreigners who inflate real-estate prices in places, like Miami, buying properties outright in cash. “We know [of] upward to $6 billion to $10 billion a year laundered through the US,” said Patrick Fallon Jr., head of the FBI’s financial crimes
section. The most extraordinary allegations in the archive revolve around Putin’s closest associates, including Sergey Roldugin, a close friend since the late 1970s when Putin was a young KGB agent. Roldugin is a cellist for the Saint Petersburg orchestra, yet his name appears as the owner of offshore companies that have rights to loans worth hundreds of millions of dollars.
A Russian news service report in 2010 disclosed that he owned at least 3 percent of Bank Rossiya, Russia’s most important bank. When Mossack Fonseca helped open a bank account in Switzerland on behalf of Roldugin, the application form asked if he had “any relation to PEPs [politically exposed persons] or VIPs.” The one-word answer was, “No.” Yet, Roldugin is godfather to Putin’s daughter Mariya. “Roldugin is, by his proximity to a serving head of state, clearly an exposed person,” Mark Pieth, a former head of the Swiss justice ministry’s organized crime division, told the ICIJ team. The documents show how in 2008 a company controlled by Roldugin had influence over Russia’s largest truck maker Kamaz, joining with several other offshore companies to help another Putin insider acquire majority control of the company. They wanted foreign investment, and German carmaker Daimler later that year bought a 10-percent stake in Kamaz for $250 million. The offshore company that connects many Putin loyalists is Sandalwood Continental Limited in the British Virgin Islands. Roldugin was a shareholder until 2012, as was Oleg Gordin, a little-
known businessman whom incorporation documents describe as linked to “law-enforcement agencies.” The files also mention a company coowned by Putin’s friend Yury Kovalchuk, the largest shareholder of Bank Rossiya. Kovalchuk was among those targeted by US sanctions in 2014 in retribution for Russia’s invasion of Crimea. Another friend, Arkady Rotenberg, Putin’s judo partner and a billionaire construction mogul, openly obtained companies through Mossack Fonseca. The Treasury Department, when sanctioning him in 2014, suggested that the oligarch acted on behalf of “a senior official.” That was widely believed to mean Putin, whose fingerprints were not on any offshore company. “When you are the president of Russia, you don’t need a written contract. You are the law,” said Karen Dawisha, an academic, former State Department official and author of the acclaimed 2014 book Putin’s Kleptocracy: Who Owns Russia?” Kremlin Spokesman Dmitry Peskov said last week that ICIJ was publishing a “series of fibs” that amounted to a media “attack” on Putin. Peskov suggested that unknown “organizations and services” were behind the media reports. MCT
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Subverting Myanmar’s Charter for its own good B N F Bloomberg News
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HEN the first act of a new legislature is to circumvent its country’s written constitution, it’s usually a bad sign. Not so in Myanmar, where the democratically elected parliament moved last week to create the post of “state counselor” and give the job to Aung San Suu Kyi, the leader and symbol of Myanmar’s long struggle against military dictatorship. She’s banned from serving as president by the constitution enacted under the military government that preceded hers, under a provision meant to prevent her from taking the office. Getting around it is a triumph of constitutional creativity and respect, not a worrisome undercutting of the rule of law. There’s a key lesson here about constitutions, their drawbacks, and their value: A constitution is more than its formal text. What matters more is how the institutions of government actually operate to give legitimacy to the exercise of state power. A functional constitution is one with the flexibility to make effective governance possible while sustaining public acceptance and approval. Myanmar’s constitution has an unappetizing pedigree. But it’s on its way to working anyway—precisely because, so far, it’s being treated as flexible enough to accommodate legitimate government. The background in this instance is Suu Kyi’s career as a dissident democracy activist and her multidecade suppression by the military regime. Not only did the regime put her under house arrest for 15 years. It also used her family against her. She was unable to see her husband, who was British and lived in the UK. And ultimately, before it chose to democratize, the regime put a clause in the constitution that said anyone whose children weren’t Myanmar citizens couldn’t be president. Everyone understood that the provision was aimed specifically at The Lady, as her followers call her. She was the only political figure whose kids held foreign citizenship. And given the vagaries of politics and democratization, they’d have to be crazy to give it up. After Suu Kyi’s National League for Democracy handily won elections in 2015, speculation arose about how she would handle the ban. It seemed conceivable that she might go for outright defiance, taking it as an opportunity to challenge the former military leaders. But Suu Kyi cautiously decided not to go toe-to-toe with the regime’s remaining power brokers. Instead, she had herself named to three different cabinet posts, including foreign minister and
Myanmar’s constitution has an unappetizing pedigree. But it’s on its way to working anyway.
minster to the presidency. She chose a proxy president who is expected to defer to her. Having done all that, she went a step further and had her party create the new state counselor job for her. Politically, this was a smart move. The old regime in Myanmar didn’t have a crisis of conscience and abolish itself. Rather, the generals made a calculated judgment that their wealth would likely expand greatly if they moved to open the economy and democratize while retaining influence and the option to retake power. Suu Kyi would like to make sure the transition to democracy can’t be reversed. For now, that means playing ball with the people who oppressed her people, locked her up and wouldn’t let her see her husband, even when he was dying. Yet, at the same time, she chose not to confront the regime directly, Suu Kyi decided she could outfox the opposition politicians associated with it by creating a quasi-presidential role outside the official presidency. That shows her understanding that, on some level, it doesn’t matter what the constitution says. What matters is what it will practically allow. The Lady is, therefore, respecting the constitutional text while subverting it. Will the constitution survive and prosper? That all depends on how the situation plays out. The public that elected Suu Kyi surely embraces the circumvention of the constitution. It will seem legitimate to them, even if they doubt the legitimacy of a constitution enacted by the regime. If the generals don’t try to block Suu Kyi from holding the new office, that will be a signal that they’re satisfied by her willingness to go around the text of their constitution, rather than defying it outright. They would be compromising, much as Suu Kyi is. Eventually, her party will probably try to amend the constitution. That’s fine—because by then, the principle of nominal respect for the document will have served its purpose. In the meantime, the choice to get around the intent and text of the constitution by creating the state counselor position shows what flexible government can look like.
Editor: Max V. de Leon • Tuesday, April 5, 2016 A5
Vietnam seizes Chinese vessel for intruding waters
A MAN places incense in a holder as about 200 Vietnamese gather in Hanoi, Vietnam, to remember 64 Vietnamese soldiers who were killed by the Chinese navy in a clash 28 years ago in the disputed South China Sea. They lit incense and laid flowers at the statue of King Ly Thai To, a Vietnamese hero, and then marched around the landmark Hoan Kiem Lake, chanting “down with Communist China’s aggression” in the commemoration that lasted an hour. There were no official commemorations by the government. AP
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IETNAM’S coast guard in a rare move has seized a Chinese vessel for allegedly intruding in its waters, state media reported on Monday.
The Thanh Nien newspaper said that the vessel has been towed to the northern port city of Hai
Phong, and that the ship, its captain and two sailors, all Chinese, are under the super vision of
110
Number of Chinese fishing boats chased by Vietnam out of its waters in the last two weeks
Vietnamese authorities. The vessel, disguised as a fishing boat, was carrying 100,000 liters of diesel oil and was intercepted by Vietnamese coast guard near Bach Long Vi island in the Gulf of Tonkin on Thursday, it said. The captain told authorities the fuel was to be sold to Chinese fishing boats operating in the area, it said. Hai Phong coast guard officials declined to comment on Monday. The newspaper said in the last two weeks of March, the coast guard had chased 110 Chinese fishing boats out of Vietnamese waters. Vietnam’s coast guard often warns and chases Chinese fishing boats out of its waters but rarely seizes them. Vietnamese fishermen complain they are harassed, attacked and have had their catches confiscated by Chinese authorities while they are fishing in the South China Sea. Vietnam is locked in a territorial dispute with China in the South China Sea, which is rich in resources and occupies one of the world busiest sea lanes. Vietnam, China and Taiwan have competing claims over the Paracel Islands which are occupied by China, while the three, along with the Philippines, Malaysia and Brunei, have claimed parts or all of the Spratly Islands. Chinese growing territorial assertiveness in the region, including recent massive land reclamation of reefs and atolls in the Spratlys and its increased military actions in the two island chains, have raised concerns among neighbors and the United States. AP
Malaysia favors China on high-speed rail project
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HINESE companies are widely considered as the forerunner for the proposed high-speed railway project linking the Malaysian capital Kuala Lumpur and Singapore, a local media reported on Sunday. A series of recent investment by Chinese state-owned companies have helped to lay the ground for the bid for the 350-kilometer high-speed railway, according to the Sunday Star, a Malaysian English newspaper. In March China Railway Group Ltd. (CREC), one of China’s largest state-owned companies, announced
a $2-billion investment to build its regional headquarter in Bandar Malaysia, the proposed terminal for the Kuala Lumpur to Singapore line. The announcement came three months after CREC’s successful bid with its Malaysian joint-venture partner last December to acquire 60 percent of the equity in the Bandar Malaysia project. On the railway bid, China is facing competitors from Japan, South Korea, France and several other countries. One of the advantages of the
Chinese side is the experience of working with Malaysia on the latter’s regular railway system and light rail transit projects, according to the Star. Chinese companies have supplied about 75 percent to 80 percent of the locomotives and coaches and related equipment to Malaysia. China Railway Rolling Stock Corp. has built a manufacturing center for Southeast Asia in Malaysia. Despite being a late comer in high-speed railway, China has developed the most cost-effective
rail system in the world, thanks to China’s research and development on major train projects and super lengthy tracks, said Goh Bok Yen, a well-known transportation planning consultant. However, Goh told the newspaper that it was far from a done deal as the project remains in an early stage. The governments of Malaysia and Singapore are expected to finalize the commercial model and procurement approach of the project by this year. PNA
Traffic-clogged Jakarta looking to suspend rush-hour carpooling initiative 3-in-1 rule L
INES of people from women holding babies to school age children, with a hand held up to show they’re for hire, are a ubiquitous sight on the Indonesian capital’s busiest roads during rush hour. But not this week. Traffic-clogged Jakarta plans to suspend its peaktime rule of three people to one car from Tuesday. And the passengers for hire, known as jockeys, who helped drivers cheat the traffic controls, will be out of a job. By lifting the 3-in-1 rule, city authorities will be testing what happens to congestion. If there’s no difference to the number of cars on the road, they’ll know that a system in place for more than a decade is broken. Abandoning the policy will be bad news for the poor in a city, where maddening traffic produces numerous novel ways to eke out a living. Apart from jockeys, there are selfappointed U-turn police and parking wardens who are tipped by drivers despite sometimes hindering more than helping. “I want the authorities to extend the 3-in-1,” said Muhammad Asmin, a 27-year-old who dropped out of school to become a jockey more than a decade ago to earn money for his family. “It is good for us, the poor,
For every vehicle, there should be at least three passengers in Jakarta during the rush hour
even if it’s not working,” said Asmin, who earns up to $15 a day by hopping in and out of cars. Jakarta is the world’s most congested city, according to a study of how often vehicles brake during a commute. Officials estimate Jakarta’s traffic jams cause economic losses of about $3 billion a year. The 3-in-1 rule was introduced in 2003 and the jockeys appeared soon after. Since then, the traffic has only gotten worse, mainly because more Indonesians can afford cars, which has overwhelmed a road network that has hardly grown. The carpooling policy has a particularly bad image since it’s widely regarded as ineffective and also involves children, who take huge risks by getting into the vehicles of strangers.
“We have been blamed for worsening the gridlock, but the government didn’t provide sufficient jobs for us,” said Alfa Wahyudi, a 21-yearold who came to Jakarta from Borneo six months ago. “Don’t blame our presence if the government is unable to provide us jobs.” The convenience of traveling on a 3-in-1 road is such that some drivers have arrangements with two or three regular jockeys. Repeated crackdowns on the jockeys, who quickly scatter into side streets at the sight of police, failed to wipe out the profession. If caught, they are taken to a detention center for a couple of weeks and asked to sign a letter promising not to work as a jockey again. But many say they return to the roadside as soon as they can. Wulandri, who was twice caught and sent to a detention center, said it was no deterrent compared with the $10 she could easily make in a day. As the mother of a 1-year-old boy, she was popular with drivers because it meant they could get two passengers for the price of one. “I purposely brought my child because usually a single driver does not have to pay for two jockeys and they are often sorry for the woman who was carrying a baby,” said Wulandari, who goes by one name.
IN this April 1 photo, a woman carries her baby as she signals to show that she’s for hire as a “jockey” to help drivers cheat a peak-time traffic rule of three people to one car during rush hour at the main business district in Jakarta. Traffic-clogged Jakarta planned to suspend the peak-time traffic rule this week, raising concerns among the jockeys that they could lose their way to eke out a living. AP
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Tuesday, April 5, 2016
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IF HE LOSES REPUBLICAN NOMINATION
Trump refuses to rule out 3rd-party run
W
ASHINGTON—Donald Trump refused on Sunday to rule out running as an independent if he fails to win the Republican presidential nomination, renewing a threat that party leaders thought they had quashed months ago. “I want to run as a Republican. I will beat Hillary Clinton,” Trump said on Fox News Sunday. W hen pressed to rule out an independent run, the New York billionaire said, “I’m gonna have to see how I was treated. It’s ver y simple.” The prospect that Trump will launch an insurgent third-party run and draw his ardent supporters away from a rival Republican nominee, widening the divisions in the GOP, is a nightmare scenario for party leaders. Some are supporting efforts to try to deny Trump the nomination if he cannot lock up enough delegates during the primaries to secure the nomination at the Republican National Convention, a movement that Trump has complained is unfair. The latest lurch in the rocky GOP race began on Tuesday when Trump publicly abandoned the pledge he signed last September to support the eventual Republican nominee even if he loses. All the GOP candidates then in the race made similar vows. At a town hall sponsored by CNN on Tuesday in Milwaukee, Trump was asked if he still felt bound by his pledge. “No, I don’t anymore,” he said.
briefs
EXAUSTRALIAN PM WANTS TO BE U.N. SECRETARYGENERAL
SYDNEY—Former Australian Prime Minister Kevin Rudd has been visiting world leaders to express his interest in running for secretary-general of the United Nations, Foreign Minister Julie Bishop said. Speaking in Washington after the Nuclear Security Summit hosted by President Barack Obama and attended by 50 other world leaders, Bishop said during her meetings“a number of people”mentioned the interest of different candidates in the UN job. “It’s quite apparent that there are still a number of people yet to put their hand up,” she said. “It seems that Mr. Rudd has visited a number of people and expressed an interest,” Bishop said on Friday. “He has not formally asked the Australian government for support, but there are a number of other countries who have also indicated to us that they will be nominating another candidate.” Under the world body’s customs, the post of secretary-general rotates between regions. It is now eastern Europe’s turn and two Bulgarian women have been nominated. The secretarygeneral is selected by the Security Council, which means permanent members Russia and the United States hold a lot of sway, and the US has pressed for a woman to head the organization for the first time. Bloomberg News/TNS
2 DEAD IN TRAINBACKHOE CRASH WERE AMTRAK WORKERS
CHESTER, Pennsylvania—An Amtrak train struck a piece of heavy equipment just south of Philadelphia on Sunday causing a derailment, killing two Amtrak workers and sending more than 30 passengers to hospitals, authorities said. Train 89 was heading from New York to Savannah, Georgia, at about 8 a.m. when it hit an equipment that was on the track in Chester, about 15 miles outside of Philadelphia, officials said. The impact derailed the lead engine of the train that was carrying more than 300 passengers and seven crewmembers. Chester Fire Commissioner Travis Thomas said two people were killed. A National Transportation Safety Board official confirmed that one was the operator of the equipment. US Sen. Chuck Schumer, Democrat-New York, said Amtrak board Chairman Anthony Coscia told him the other person killed was a supervisor and both were Amtrak employees. AP
1,237
Number of delegates needed to win the Republican presidential nomination
Asked why, he responded, “I have been treated very unfairly.” During the same town hall, Trump’s remaining rivals, Sen. Ted Cruz of Texas and Ohio Gov. John Kasich, also appeared to back off their pledges to support the GOP nominee. Neither was as direct as Trump, however. Po l l s s h o w Tr u m p t r a i l ing Cruz in Wisconsin, which holds its primar y on Tuesday. But Tr u mp appea rs on sol id ground in New York and several other states that vote later this month, and he still could lock up enough delegates to win the nomination outright. Reince Priebus, chairman of the Republican National Committee, warned on Sunday that Trump’s backsliding on the pledge could discourage rank-and-file Republicans and party leaders
PASTOR Joshua Nink (right) prays for Republican presidential candidate Donald Trump, as his wife, Melania (left), watches after a service at First Christian Church in Council Bluffs, Iowa, on January 31. The list of prominent evangelicals denouncing Trump is growing. The bloc of voters powering the real-estate mogul through the Republican primaries is significantly weighted with white born-again Christians. AP/JAE C. HONG
from supporting him if he wins the nomination. “Those kinds of comments, I think, have consequences,” Priebus said on ABC’s This Week. “And so when you make those kinds of comments, and you want people to fall in line for you, it makes it more difficult.” At stake for a potential nominee is a valuable database of contacts and party machinery
to get out Republican voters in the general election. “If you were running for president of the Kiwanis Club or the Boy Scouts and you said you don’t know if you like the Kiwanis or the Boy Scouts, I think that makes your challenge even greater to ultimately win those kinds of posts,” Priebus said. “It’s not different for the Republican Party,” he added.
Priebus appeared on all five major TV talk shows on Sunday, in part to tamp down allegations that party leaders are trying to game the GOP’s arcane candidate selection rules to deny the nomination to Trump. Pr iebus insisted the GOP wou ld select its candidate fairly and openly, a lthough he made clear that Republicans are prepar ing for
the possibilit y of a contested convention on July 18 in Cleveland. If no candidate secures 1,237 delegates on a first ballot, many delegates would be free to pick another candidate in subsequent rounds of voting. So Trump—who has won the most delegates so far, but may not reach the required tally—still could lose the nomination. TNS
They flee N. Korea, only to be adrift in the South S
EOU L , Sout h K orea— A middle-aged man is walking through a quiet Seoul neighborhood when he suddenly stops. He lights a cigarette, cupping his hands to shield the flame from the winter wind, and takes a deep draw, remembering how things used to be. He’s a former policeman, a broad-shouldered man with a growling voice and a crushing handshake. Back where he came from, he says, he was someone who mattered. “In North Korea, people were afraid of me.” He says it wistfully, almost sadly, like a boy talking about a dog he once had. “They knew I could just drag them away.” That fear meant respect, and bribes, in the North Korean town where he lived, a place where the electricity rarely worked and the Internet was only a rumor. It meant he could buy a TV, and that he had food, even as those around him went hungry. It meant that when he grew exhausted by the relentless poverty and oppression around him, and when relatives abroad offered to advance him the money to escape, he had connections to a good smuggler. Just over a year ago, that smuggler showed him where to slip across a river and into China, on his way to South Korea. His new home is one of the wealthiest and most technologically advanced nations in the world. It has a thriving democracy and a per-capita income at least 12 times larger than the North’s. Seoul is a city of infinite shopping choices, glass-fronted office towers and armies of exquisitely dressed businesspeople. He used to dream of the easy life he’d have here. And what does he think now?
EXILED North Korean Lee Gae Yoon poses at her home in Seoul, South Korea. Lee, who was raised on a collective farm, left North Korea in 2010 with only a high-school diploma. Six years later, she’s a published poet who often writes about her childhood and the famine, and is midway through a degree in Korean literature at one of Seoul’s top universities. AP/LEE JIN-MAN
“Sometimes, when my work is too hard, I think about my job as a policeman,” says the man, who spoke on condition his name not be used, fearing for the safety of relatives who still live in the North. “I didn’t have problems with money back then. I ate what I wanted to eat.” He pauses, thinking about his decision to leave: “There are times when I regret it a lot.” Every year, thousands of North Koreans risk imprisonment, or worse, to leave their homeland, many hoping to eventually reach the South. Instead, they often find themselves lost in a nation where they thought they’d feel at home, struggling with depression, discrimination, joblessness and their own lingering pride in the repres-
sive nation they left behind. Surveys have shown that up to one-third would return home if they could. Take the former policeman, an increasingly bitter day laborer who now supports his family hauling bags of cement through the sprawling apartment blocks constantly under construction around Seoul. His hands are rougher than sandpaper now. His fingernails are warped. He sleeps most nights in a dormitory near his latest construction site, just outside the city, only occasionally visiting his wife and the rest of his family, who live in a middle-class Seoul neighborhood. “I knew that South Korea was a capitalist country, that it was very rich. I thought that if I can just get
there, I can work less but earn a lot of money,” he says. He grimaces when he thinks of his naiveté. More than 27,000 North Koreans exiles live in the South, most arriving since a brutal famine tore at the country in the mid-1990s. Government control foundered amid widespread starvation, and security loosened along the border with China. While security has again tightened, nearly 1,300 refugees reached South Korea last year, according to statistics compiled by the Seoul government. For most, the journey required bribing border guards, life underground in China for months or years, and weeks of travel through still more countries.
They left behind one of the most isolated nations in the world, where the ruling family has been worshipped now for three generations, and only a minuscule elite is allowed to make international phone calls. It has no free press or political opposition. While the famine is over, the country remains very poor, with hunger and malnutrition serious problems. It’s a country where jobs are assigned by the government, but where most families now survive by selling everything from rice to car parts in an ever-growing network of markets. Most North Korean refugees come from collective farms or hardscrabble towns near the Chinese border. Few have more than a high-school education. Tens of thousands of North Koreans are believed to live underground in China. Some stay permanently, while others slip back into the North after earning extra money. For many, though, the lure of a wealthy, Korean-speaking nation is strong, even if refugees’ expectations of the South are often shaped less by reality and more by the bootlegged southern soap operas that are wildly popular in the North. Those who go find themselves living in one of the most brutally competitive countries in the world, where education is worshipped, toddlers are offered exam-prep classes and a drive for perfection has produced one of the world’s highest rates of plastic surgery. “Life in South Korea is competitive,” Hong Yong-pyo, South Korea’s minister of unification, said in a recent speech to a group of defectors. “For you to succeed in this competition, you need to push yourself on your own.” AP
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India’s prime minister in Saudi for economic, defense pacts
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IYADH, Saudi Arabia— India’s Prime Minister Narendra Modi met with Saudi King Salman on Sunday during his first official visit to the kingdom, home to a large number of Indian laborers and a major trade partner that supplies around 19 percent of India’s crude oil imports. Modi’s visit underscored the major business ties between the t wo countr ies, despite Saudi Arabia’s historically close relationship with India’s longstanding rival Pakistan. Modi visited Pakistan in December, suggesting a thawing of relations between the two nucleararmed neighbors. Saudi Arabia is traditionally India’s largest supplier of crude oil, and India is one of the world ’s largest consumers of crude. Trade between the two countries reached $39 billion in 2014, according to a joint statement released after Mod i ’s meeting w ith K ing Salman. Saudi Arabia is seeking to keep its edge over rival Iran, which is looking to increase its own oil exports to India. The kingdom is also rushing to diversify its economy as lower global oil prices impact revenue. During their meeting, the sides signed five agreements, including plans to cooperate in intelligence sharing related to terror financing and money laundering, as well as a labor cooperation agreement and another to promote bilateral investments in the private sector. The two also agreed on the need to intensify defense cooperation through mutual visits by military experts and joint military exercises. In a joint statement, Salman and Modi said they strongly condemned terrorism and reject any attempts “to link this universal phenomenon to any particular race, religion or culture.” Modi, who has come under fire for his party’s links to hard-line Hindu groups, has long had an uneasy relationship with his country’s roughly 120 million Muslims. St i l l, Mod i g i f ted K i ng Salman a gold-plated replica of a mosque in Kerala, India, that was built by Arab traders in the early 7th Century. For his par t, Sa lman aw a rded Mod i w it h Saud i A r a b i a ’s h i g h e s t c i v i l i a n honor, the K ing Abdu laziz Sash. Modi a lso met Crow n Prince and Interior Minister Mohammed bin Nayef and held one-on-one ta lks w ith Saudi Foreig n Minister Adel a l-Jubeir and board chairman of Saudi oil giant A ramco, Abdu laziz a l-Fa leh, who is a lso the hea lth minister. E a r l i e r o n S u n d a y, h e spoke at the Saudi Chamber of Commerce and Industr y, met members of India’s business communit y and v isited a n a l l-fem a le i nfor m at ion te c h nolog y ce nte r r u n b y the Indian Tata Consultancy Ser v ices in R iyad h. Modi kicked off his tour on Saturday with a visit to a labor camp where he was pictured eating a traditional South Asian dinner with Indian workers amid tight security. Ind ia a nd ot her Sout h Asian countries supply oilrich Gulf Arab nations with mil lions of migrant laborers who take on low-paying jobs as construction workers, waiters, cleaners and drivers—jobs that Gulf nationals have often shunned. AP
MIGRANTS get on a ferry at the port of Mytilini in the Greek island of Lesbos, on Monday, the first day of the implementation of the deal between the European Union and Turkey. AP/PETROS GIANNAKOURIS
UNDER CONTROVERSIAL EUROPEAN UNION PLAN
Greece begins deportation 202 A
THENS, Greece—Under heavy security, authorities on the Greek islands of Lesbos and Chios deported 202 migrants and refugees on boats bound for Turkey—the first to be sent back as part of a controversial European Union (EU) plan to limit the amount of migration to Europe. The operation that started at dawn, as migrants were escorted onto small ferries by officers from the EU border protection agency, Frontex, to nearby ports on the Turkish coast, under the program
which has been strongly criticized by human-rights groups. “All of the migrants returned are from Pakistan except for two migrants from Syria, who returned voluntarily,” Giorgos
Kyritsis, a spokesman for a government refugee crisis committee, told state TV. “There is no timetable for returns. Examining [asylum] applications will take some time.” About 4,000 migrants and refugees are being detained on Greek islands since the agreement came into effect on March 20. Kyritsis said 136 migrants were deported from Lesbos and 66 from the nearby island of Chios, where riot police clashed with local residents hours earlier during a protest against expulsions. “This is the first day of a very difficult time for refugee rights. Despite the serious legal gaps and lack of adequate protection in Turkey, the EU is forging ahead with a dangerous deal,” Giorgos Kosmopoulos,
Number of migrants deported from Greece
head of Amnesty International in Greece, told The Associated Press from Lesbos. “Turkey is not a safe third country for refugees. The EU and Greek authorities know this and have no excuse.” The operation was supervised by a lieutenant general of the Greek police and occurred peacefully, as ships departed from Lesbos to the Turkish port of Dikili. The deportations started with migrants who did not apply for asylum or had their applications declared inadmissible.
“Even if this first group is not refugees, what we are seeing here is symbolic kick-off of what might be a very dangerous practice of returns to Turkey,” Kosmopoulos said. The EU and Turkey reached the deal last month, after European countries struggled to avoid a repeat of a surge in migration in 2015, which saw more than a million people reach the continent, many fleeing civil war in Syria. In return for re-admitting migrants, Ankara was promised more financial aid an visa-free travel in the EU for its citizens. A total of 50,000 migrants and refugees are stranded in Greece following EU and Balkan border closures, but only those who arrived after March 20 will be detained for deportation. AP
First passenger flight leaves Brussels since March 22 attacks
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RUSSELS—It was an emotional send-off on Sunday for a Brussels Airlines plane heading to the Portuguese city of Faro—the first passenger flight to take off from Brussels Airport since suicide bombings on March 22 ripped through its check-in counters and killed 16 people. Airport officials suggested the first flight out was a symbolic victory over those who sowed death and hate, but said it would be months until full service is back. Security at the airport was tight with new check-in procedures for passengers in temporar y structures. Two other planes were leav ing on Sunday—Brussels Airlines f lights to Athens and Turin, Italy. The three f lights were a test run for a European aviation hub that used to handle 600 f lights a day and plans to slowly climb back to normal capacity. Arnaud Feist,
THREE Brussels Airlines planes stand at departure gates at Brussels Airport, in Zaventem, Belgium, on Sunday. Under extra security, three Brussels Airlines flights, the first for Faro in Portugal, were scheduled to leave on Sunday from an airport that used to handle about 600 flights a day. AP/GEERT VANDEN WIJNGAERT
the CEO of Brussels Airport Co., said at a Saturday news conference that the three f lights were a “sign of hope” following “the darkest days in the history of aviation in Belgium.” On Sunday he thanked employees for
their courage, solidarity and the “impressive work carried out in so little time.” “We are more than an airport... We are a family more bound together than ever,” he said at a ceremony at the airport. “It will take time to
accept what happened and more time to get over the pain,” Feist said as the flight for Faro took off. “But we will never forget.” Damage was extensive when double suicide bombs exploded near its crowded check-in counters 12 days ago, killing 16 and maiming people from around the world. Another bombing that day on a Brussels subway train killed 16 other people. Both attacks were claimed by the Islamic State group. Feist said Belgium’s biggest airport would gradually climb to 20 percent of capacity in the coming days, able to process 800 passengers an hour—maximum capacity for the temporary structures. He said on Saturday that he hoped full service at the airport could be restored by the end of June or beginning of July, in time for the summer vacation season. However, traffic may take time to return to its previous pace. Delta
Airlines said on Saturday that it was suspending service between Atlanta and Brussels until March 2017. “This is a very symbolic, also a very emotional moment for the airport community,” airport president Marc Descheemaecker said at the ceremony. “We are turning a page, a page full of blood, but we have to rebuild this airport and we will do so.” New security measures at the airport aimed to minimize the chances of any repeat attacks. Police on Sunday conducted spot checks of vehicles before they arrived. A large white tent was set up outside the terminal to screen travelers’ IDs, travel documents and bags before they were allowed to enter an especially built area for check-in. A drop-off parking area outside the terminal was closed down and authorities said there would be no rail or public transport access to the airport for the foreseeable future. AP
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Tuesday, April 5, 2015
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IS claims Saudi police station bombing
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SYRIAN soldiers and Russian soldiers stand near a car covered by collage showing photos of faces of Russian President Vladimir Putin (right), Syrian President Bashar al-Assad (left) and a Syrian general, Assad’s brother, Maher Assad, in Maarzaf, about 15 kilometers west of Hama. AP/PAVEL GOLOVKIN
After Palmyra, Syrian troops take another IS-controlled town
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AMASCUS, Syria—A week after taking back the historic town of Palmyra, Syrian troops and their allies on Sunday captured another town controlled by the Islamic State (IS) group in central Syria, state media reported. The push into the town of Qaryatain took place under the cover of Russian air strikes and dealt another setback to the IS extremists in Syria. An activist group that monitors the Syrian civil war said that government forces are in control of most of the town after IS fighters withdrew to its eastern outskirts. The advance came a week after Syrian forces recaptured Palmyra from IS and is strategically significant for the government side. The capture of Qaryatain deprives IS of a main base in central Syria and could be used by government forces in the future to launch attacks on IS-held areas near the Iraqi border. Qaryatain used to be home to a sizable Christian population and lies midway between Palmyra and the capital, Damascus. Activists said last summer that Qaryatain had a mixed population of around 40,000 Sunni Muslims and Christians, as well as thousands of internally displaced people who had fled from the nearby city of Homs.
40,000 The mixed population living in Qaryatain town Many of the Christians fled the town after it came under IS attack. Dozens of Qaryatain’s Christians and other residents have been abducted by the extremists. While the town was under IS control, some were released, others were made to sign pledges to pay a tax imposed on non-Muslims. W h i le I S e x t rem i st s ble w up and destroyed some of the world ’s most precious relics at Palmyra’s archaeological sites dur ing their 10 -month reig n there, the ancient Saint Eliane Monaster y near Qar yatain was also bulldozed and destroyed shortly after IS took the town last August.
Christians make up about 10 percent of Syria’s prewar population of 23 million people. The Syrian army command said in a statement that troops have “restored security and stability to Qaryatain and farms surrounding it.” The statement, read by an army general on state TV, said the oil and gas pipelines in the area will be secured and IS supply routes between eastern desert and the Qalamoun region will be cut. A Syrian army general, speaking live from Qaryatain with the Lebanon-based Al-Mayadeen TV, said troops are now dismantling bombs placed by extremists and will prepare to launch fresh attacks on areas held by IS. “Fighting was going from one house to another,” another army officer told Al-Mayadeen TV, also speaking from inside Qaryatain. He added that IS had suicide attackers who were trying to block the push by the army into the town. The Britain-based Syrian Observatory for Human Rights said intense fighting was under way in Qaryatain, as government troops fight to capture all parts of the town. The Observatory’s chief Rami Abdurrahman said that IS fighters are still in control of small areas east of the town but “are on the verge of collapse.” Abdurrahman added that the extremists are withdrawing toward eastern parts of the mountainous Qalamoun region. The Observatory reported later in the day that IS fighters have withdrawn from much of the town
toward the eastern suburbs of Qaryatain. IS has suffered major defeats in Syria in recent months amid intense air strikes by Russian warplanes. Earlier on Sunday, the Observatory reported that fighting in northern Syria the previous day killed several fighters belonging to the Lebanese militant Hezbollah group. Hezbollah has been fighting alongside President Bashar Assad’s troops in Syria’s civil war. The Observatory said 12 Hezbollah fighters were killed and dozens were wounded in Saturday’s attack by militants led by al-Qaeda’s Syria branch—known as the Nusra Front—on the northern village of al-Ais. In southern Lebanon social-media postings on Sunday carried photos of seven Hezbollah fighters said to be among those killed in al-Ais. Though Nusra Front is not part of a US-Russia-engineered truce between the Syrian government forces and Western-backed rebels, the fighting has threated to undermine the cease-fire that has largely held for over a month. S e p a r at e l y, a mo n it o r i n g group said a leader of the Nusra Front was killed in a US air strike on Sunday in a northern part of the country along with his son and several other people. The SITE Intelligence Group, which monitors jihadi web sites, says that Abu Firas al-Souri, a spokesman for the Nusra Front, was killed in the attack in the province of Idlib. The report could not be independently verified. AP
AIRO—An Islamic State (IS) affiliate in Saudi Arabia claimed on Sunday that its militants detonated two explosive devices in front of a police station in the city of al-Dalam, setting fire to three police vehicles. Also on Sunday, Saudi Interior Ministry Spokesman Maj. Gen. Mansour al-Turki said a person was killed by an improvised explosive device near the police station in al-Dalam. The statement, carried by the Saudi Press Agency, said police are investigating the incident, which took place on Saturday, but gave no further details on the victim’s nationality, who was referred to as a resident. The statement issued by the IS affiliate Najd Province made no reference to that deadly attack, only saying on Sunday its bombing took place a day earlier. It gave no further details. Some Saudi news web sites published images of the aftermath late on Saturday night, showing police jeeps and sport-utility vehicles on fire outside the police station in al-Dalam, located 100-kilometers southeast of the capital Riyadh. No deaths or injuries were reported. Local police Spokesman Fawaz al-Mayman, quoted by the Almowaten web site, said the incident is still under investigation and that the police would issue a statement soon. There have been several attacks in Saudi Arabia over the past year carried out by
Maldives police break up media protest; 19 arrested
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OLOMBO, Sri Lanka—The police in the Maldives used pepper spray to break up a protest by jour na lists and act iv ists acc u si ng t he gover nment of stif ling press freedom, arresting and brief ly detaining 19 of the jour na lists. The Maldives, a South Asian archipelago nation k now n mainly for its luxur y resorts, became a mu ltipar t y democracy in 2008 after decades of autocratic rule. However, democratic gains have been rapidly eroding in recent years. About 50 protesters rallied near the president’s office on Sunday against the government’s move to criminalize defamation, as well as other measures allegedly taken against the media. President Yameen Abdul Gayoom’s ruling party has presented a bill in parliament that proposes heavy fines and jail terms for defamation. The demonstrators also accused the government of having a part in a court order that suspended publication of the Maldives’s oldest newspaper.
Iraqi forces take northern edge of IS-held town
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ĪT, Iraq—Iraqi forces took the northern edge of the Islamic State (IS)-held town of Hīt, west of Baghdad, on Sunday in an operation led by the country’s elite counterterrorism forces, military officials said. The operation to recapture Hīt was relaunched last week, but the troops’ progress has been slowed by hundreds of roadside bombs and efforts to safeguard thousands of civilians trapped inside the town. “We’ve never had a delay like this on one of our targets,” Gen. Husham al-Jabri said of Iraq’s counterterrorism forces. Al-Jabri carefully plotted progress toward Hīt on a map in a temporary operations center just south of the city. The initial push to take Hīt was launched last month, but was quickly put on hold when Iraq’s Prime Minister Haider al-Abadi pulled
forces back to Baghdad after antigovernment protests threatened instability in the Iraqi capital. After the operation resumed, Iraqi forces had to deal with hundreds of roadside bombs laid by IS fighters along the main roads leading in and out of Hīt, forcing convoys to veer off into the surrounding desert terrain. Even there, the forces’ advance was repeatedly brought to a standstill by booby-trapped explosives. Progress was further complicated by muddy conditions after days of rainfall. “The roadside bomb is the only weapon they have left to depend on,” said Ayad Ghazi, a sergeant with one of the leading battalions inching toward the town. Just a few hundred meters ahead of him plumes of orange smoke rose from controlled blasts. He said it took his men 12 hours to travel
just 5 kilometers on Sunday. While initially used on a limited basis by al-Qaeda in Iraq, the predecessor to the IS group, IS now produces roadside bombs on an industrial scale. IS fighters use these bombs defensively, placing the devices to essentially create mine fields to impede advancing government forces. IS also litters cities and towns with the explosive devices to hinder pursuit of their f leeing fighters. Iraqi forces have struggled to train and equip enough units to deal with the sheer volume of the bombs. The US-led coalition said Iraqi forces were in the outskirts of Hīt and working to surround the town, seeking to build on recent gains made by government forces with the recapture in February of Ramadi, the capital of Anbar Province in central Iraq. AP
local IS group affiliates. The Najd Province affiliate is the kingdom’s most active. It claimed responsibility for two major bombings in eastern Saudi Arabia and one in Kuwait that killed 53 people at Shiite mosques last May and June. Najd Province is the traditional name for the central heartland of the peninsula and the homeland of the ruling Al Saud family. A nother IS -inspired g roup, calling itself the Hijaz Province affiliate, said it was behind a mosque bombing inside a police compound that k il led 15 people last Aug ust. T he Bahrain Prov ince affiliate claimed responsibility for a shooting in eastern Saudi Arabia that killed five worshippers last October. A similar attack in late January outside a Shiite mosque in eastern Saudi Arabia killed four people, though no group claimed responsibility. Last month, Saudi police killed six men they said were wanted for the murder of a counterterrorism security officer, whose death was filmed and posted online by the suspects who declared their allegiance to the IS group. Saudi Arabia is part of the US-led coalition bombing the IS group in Iraq and Syria. IS leader Abu Bakr al-Baghdadi has called Saudi Arabia’s Western-allied rulers “apostates” and has encouraged attacks against the Sunni-ruled kingdom. AP
CIVILIANS wait to be checked at a checkpoint at the entrance to Ramadi, 115 kilometers west of Baghdad, Iraq, on Sunday. Thousands of civilians have returned to the city after Iraqi government forces retook the Anbar provincial capital from the Islamic State group earlier this year. AP/KHALID MOHAMMED
Other issues raised during the protest included delays in investigating the disappearance of a journalist two years ago and some media organizations being barred from court reporting. The police said in a statement that the protest was broken up because the demonstrators had gathered in a protected zone near the president’s office and scaled the barricades. They said 19 journalists were arrested. All 19 were released late on Sunday, hours after being arrested. They were not charged, but the police asked them to cooperate into their investigation into the protest. Government Spokesman Ibrahim Hussain Shihab said that police used pepper spray on the protesters. Shihab said he had misspoken earlier when he said that tear gas had also been used. Meanwhile, police confirmed for the first time that Ahmed Rilwan, the journalist went missing in 2014, had been abducted. Rilwan worked for a pro-opposition web site at the time of his disappearance. AP
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Audit finds UN deficiencies linked to alleged bribery case
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PILLOW FIGHT A participant is covered in feathers during a pillow fight in Beijing, China, on Saturday. Dozens of participants battled each other with feather pillows as a part of a promotional event at a bar. AP/NG HAN GUAN
Canada’s oil industry braces for more job cuts
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FTER almost two years of sinking oil prices and at least 40,000 job cuts, Canada’s petroleum industry still isn’t finished tackling its bloated operations. The next round of layoffs has already begun with Cenovus Energy Inc. and Murphy Oil Corp. announcing work-force reductions last week. Ongoing cuts by Suncor Energy Inc., Encana Corp. and others will likely result in thousands more jobs lost by the end of the year as the Canadian industry shaves billions worth of spending in order to continue operating in one of the world’s most expensive oil-producing regions. “It will probably take another six months before some of the bloated staffing levels are tackled,” said Todd Hirsch, chief economist at ATB Financial in Calgary. “Many of these companies are getting employment levels down to the bare bones and over the spring and summer there will be more layoffs.” Crude that averaged about $90 a barrel over five years before starting to collapse in June 2014 supercharged oil sands investment in northern Alberta, where the break-even costs from existing operations are the highest in the world, according to consultancy Rystad Energy. Some companies, including Encana, will have reduced their work forces to about half their peak levels when they’re done. The largest 27 Canadian producers are set to spend 32-percent less on average this year, including reductions by Imperial Oil Ltd. and Cenovus, according to company forecasts and analysts’ estimates compiled by Bloomberg. It follows a similar reduction in spending in 2015. Collapsing cash flow is the best barometer of the challenges companies face, said Jackie Forrest, vice president at ARC Financial Corp. This year, cash flow will likely fall to about C$17.5 billion ($13.5 billion), or roughly half last year’s level, and less than a fourth of the C$72 billion generated in 2014. “We’re going to see all kinds of innovation on cost cutting,” she said. “Unfortunately headcount is one of the first approaches they take.” Canada’s petroleum industry probably employs about 200,000 people, according to industry estimates. Oil and natural gas account for more than a quarter of the Alberta economy and until 2014 crude was Canada’s most valuable export. Unemployment in Alberta at 7.9 percent in February is now more than the national average for the first time since 1988, the year Calgary hosted the XV Winter Olympics. Back then, Canadian oil production was about 1.5 million barrels a day, compared with about 4.5 million now. Canada’s unemployment rate for March will be disclosed April 8. Bloomberg News
800 Australians investigated after offshore accounts leak
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YDNEY—More than 800 wealthy Australians are under investigation by the Australian Tax Office for possible tax evasion linked to their alleged dealings with a Panamanian law firm, the tax agency said on Monday.
11.5M Total number of records of offshore holdings of wealthy persons worldwide
The investigation comes one day after an international coalition of media outlets published details of an investigation into the offshore financial dealings of the world’s wealthy elite, based on a massive cache of documents provided by an anonymous source. The Washington-based International Consortium of Investigative Journalists (ICIJ) said the cache of 11.5 million records detailed the offshore holdings of a dozen current and former world leaders, along with businessmen, celebrities and sports stars. Ramon Fonseca, a cofounder of Panama-based law firm Mossack Fonseca—one of the world’s largest creators of shell companies— confirmed to Panama’s Channel 2 television network that the papers were authentic and had been obtained illegally by hackers. The Australian Tax Office said in a statement that it had identified over 800 individual Australian taxpayers in the data, and linked more than 120 of them to an associate offshore service provider in Hong Kong. The agency did not name the provider. The tax office’s deputy commissioner, Michael Cranston, said the agency was working with the
Australian Federal Police, Australian Crime Commission and the nation’s financial intelligence agency, Austrac, to cross-check data from the documents. The tax office has in recent years boosted its focus on taxpayers who fail to disclose offshore income and assets. Cranston said the agency has been analyzing information from the data leak against information taxpayers had reported to the government. Cranston said the data includes some taxpayers it has previously investigated and a small number who had reported their assets to the tax office under a 2014 volun-
tary offshore disclosure initiative. “It also includes a large number of taxpayers who haven’t prev iously come for ward, including high wealth individuals, and we are already taking action on those cases,” Cranston said in a statement. “ Through data analysis we have been able to identify patterns such as clusters of individual taxpayer and advisers for further investigation.” Meanwhile, in neighboring New Zealand, Prime Minister John Key rejected the ICIJ’s characterization of his country as among 21 tax havens used by Mossack Fonseca. “Tax havens are where there is nondisclosure of information,” Key said. “New Zealand has full disclosure of information.” Key added that the country has had the same tax laws for trusts since 1988, which were given a clean bill of health in a 2013 review by the Organization for Economic Cooperation and Development. He said the country had been strengthening its rules over time.
“You can’t stop people writing something that might be factually incorrect,” he said of the news reports. Revenue Minister Michael Woodhouse said the country doesn’t tax foreign income earned by foreigners and that the same principles apply to trusts. “It is ridiculous to suggest that New Zealand is a tax haven, as tax havens thrive on secrecy,” he said in a statement. But opposition leader Andrew Little said the country’s reputation was at risk because it was becoming a favorite investment location for foreign companies looking to keep their profits tax-free. He said a loophole allowed some foreign trusts to avoid any tax obligations in New Zealand and to avoid filing an annual income tax return there. “The Prime Minister must take urgent action to close this loophole to protect the integrity of New Zealand’s tax system and our international reputation for honesty and transparency,” Little said in a statement. AP
A SECURITY guard sit outside the Mossack Fonseca law firm in Panama City on Sunday. German daily Sueddeutsche Zeitung says it has obtained a vast trove of documents detailing the offshore financial dealings of the rich and famous. The International Consortium of Investigative Journalism says the latest trove contains includes nearly 40 years of data from the Panama-based law firm, Mossack Fonseca. The company didn’t immediately respond to a request for comment. AP/ARNULFO FRANCO
NI T ED NAT IONS —A n internal audit has found important deficiencies and lapses in the UN’s involvement with two foundations and several non-governmental organizations (NGOs) linked to an alleged bribery case involving former General Assembly President John Ashe. The audit by the Office of Internal Oversight Services obtained early on Monday by The Associated Press said the UN’s failure to check out certain NGOs before dealing with them put the UN’s “integrity, independence and impartiality” at risk. The office gave the UN Secretariat a “partially satisfactory” overall result in complying with UN policies and procedures, saying “important—but not critical or pervasive—deficiencies exist.” Ashe, a former UN ambassador from Antigua and Barbuda who served in the largely ceremonial post of president of the 193-nation assembly from September 2013 to September 2014, is accused by US federal authorities of turning the position into a “platform for profit” by accepting more than $1 million in bribes. The alleged conspiracy involves six others, including a billionaire Chinese real-estate mogul, two diplomats and a humanitarian organization officer. Ashe’s arrest last October put a spotlight on the money the UN and its key players accept from outside entities and how donations and partners are vetted. SecretaryGeneral Ban Ki-moon ordered the audit days later. The Office of Internal Oversight Services gave several examples of the UN’s failure to check out foundations and organizations that exposed the world body to the risk it could be involved with organizations whose interests conflicted with the UN’s. It said the United Nations Office for Partnerships accepted a $60,000 contribution from the Global Sustainability Foundation, whose leader Sheri Yan was an adviser to Ashe during his presidency and is accused in the alleged scheme, without performing any due diligence check. There was no evidence of checks before projects were undertaken with the International Organization for South-South Cooperation whose president, Francis Lorenzo, a deputy UN ambassador from the Dominican Republic, also has been charged in the alleged bribery scheme. The Sun Kian Ip Group Foundation headed by Macau billionaire Ng Lap Seng, accused of lying about plans for $4.5 million in cash brought into the US over several years aboard private jets, was also audited. Prosecutors say Ng wanted to build a multibilliondollar UN-sponsored conference center in Macau as a sort of satellite operation for the world body. The auditors said the foundation cosponsored a forum on South-South cooperation in Macau in August 2015 with the UN Development Program. All participants, including some UN staff, received iPads worth at least $599 plus taxes—and three UN staffers kept them until after the audit was announced, which violates the UN policy on gifts. It recommended that the secretary-general take “appropriate corrective action” against the staff members. The auditors made a series of other recommendations, including urging the secretarygeneral to ensure that all UN bodies check out NGOs, businesses, foundations and other civil society organizations before they are engaged as UN partners. UN Spokesman Stephane D uja r r ic sa id t he sec ret a r ygenera l “ is plea sed t h at t he audit...shows that many of the control systems in place within the organization were found to be working properly.” AP
A10 Tuesday, April 5, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Our problems are also their problems
W
E have spoken about this before, that when a problem arises that affects the Philippines, we act as if we are somehow unique. Then comes a period of “overacting” about the situation rather than making a hard examination and looking for reasonable solutions.
The Kidapawan rally dispersal that resulted in lives lost and numerous injuries is an example. Days before that event, a similar situation occurred in Peru, where there was a violent protest and a clash between the people and the police. Local people are angry that the Autonomous University of Tayacaja, which was built five years ago, has still not been opened. You think the Philippines is unique? From euronews.com: “Police were pelted with rocks, while officers fired back with tear gas. The clashes broke out when police attempted to clear protesters off a road.” The citizenship issue of presidential candidate Grace Poe has brought a flurry of Philippine bashers mocking the nation with Onli in da Pilipins. Except US Sen. Ted Cruz—running for nomination as president of the US—faces a similar citizenship issue, having been born in Canada to a Cuban father and an American mother. The courts have decided he, too, is eligible to run and this has brought a firestorm of disagreement. You think the Philippines is the only country that is having a direct confrontation with China over territorial claims? From nytimes.com: “China’s Coast Guard rammed one of the country’s fishing boats to pry it free from the Indonesian authorities who had seized it over the weekend. The boat was stopped for fishing illegally in Indonesia’s waters and was being towed to port when the Chinese took it back, leaving its crew in the hands of Indonesia.” There has been concern and dissatisfaction with the way the Commission on Elections may have errors in registering voters and a voters’ list that may be inaccurate. From timesofindia.com: “The Election Commission of India is to purge fake and duplicate voters from the electoral roll. We have removed nearly 65,000 names from the list.” And what is one of most pressing problems in the Indian election? From wsj.com: “The big question for some voters isn’t who will win, it is how much candidates will dole out in cash, alcohol and other goodies to bag their support.” The Philippines, like all other countries, is unique. But our problems are not special to our nation. These are societal difficulties that plague us as human beings. There were no deaths in Peru because the police used only tear gas. What’s our excuse? Maybe we should be comparing notes with India on how to take vote-buying out of the electoral process instead of complaining about Philippine politics. Is our Department of Foreign Affairs talking to its counterpart in Indonesia about this latest incident with the Chinese? Our problems are also their problems, and we can learn from one another how to find the best solutions.
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Elections fail to trigger boom Manny B. Villar
THE ENTREPRENEUR
I
N a consumption-driven economy like the Philippines, elections provide a seasonal boost to growth, faster than in a nonelection year. This is evident, particularly in the first half of the year, when election-related spending peaks.
The economy should be booming, but with the first quarter over, I still don’t see it happening. Instead, the forecasts coming out point to a gross domestic product (GDP) growth of around 6 percent, definitely not a booming rate. Both the Asian Development Bank (ADB) and Moody’s Investors Service expect the Philippine economy to grow by 6.0 percent this year, only slightly better than last year’s 5.8 percent and even lower than the 6.1 percent posted in 2014. If we look back at first-semester growth rates in the past two election years, the 6-percent forecast should not make us happy. It is not an upsurge, just like we achieved in the first half of 2010. In 2010, when the last presidential election was held, GDP was expected to grow by 7 percent to 8 percent.
HOM
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The ADB and Moody’s, in their latest forecast on the economy, expect the Philippines to sustain its growth momentum in 2015 and 2016, driven by consumption and public investment. In fairness, the Philippines is in a better position than export-oriented countries like Malaysia and Thailand, which continue to suffer from slow demand in the foreign markets. Our consolation is that growth remains steady. We should also benefit from the improving prospects of the global economy. It seems the worst is over for the world economy. Global slowdown is not over yet, but current conditions are not like in January this year. Stock markets are stabilizing and commodities are recovering. For instance, foreign investors pulled $63 million from the domestic stock market in January, as uncertainty over China and
Don’t worry, be happy...until 2020 John Mangun
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GDP actually grew by 7.9 percent, the highest semestral growth since the 9.3 percent posted in the second semester of 1988. The following two years, when no elections were held, first-semester growth tapered down to 4.0 percent in 2011 and 6.1 percent in 2012. In 2013, when the country held midterm elections, GDP grew by 7.6 percent in the first semester. The first-quarter growth of 7.8 percent, followed by 7.5 percent in the second quarter, made the Philippines the fastest-growing economy in Southeast Asia, and even beat China’s firstquarter growth of 7.7 percent. Unfortunately, the economy failed to sustain high growth in the following nonelection years. GDP grew by 6.0 percent in the first half of 2014 and by 5.3 percent in the same period in 2015.
In fairness, the Philippines is in a better position than exportoriented countries like Malaysia and Thailand, which continue to suffer from slow demand in the foreign markets. Our consolation is that growth remains steady. We should also benefit from the improving prospects of the global economy.
T
HEY used to be on every corner of the Internet like the dozens of pearl-shake stands that used to dot the malls and streets. That was a few years ago, when we were told that the price of gold would go to $3,000, $5,000 or even $10,000 an ounce.
Economies from New Zealand to Italy and every one in between, including the Philippines, should have collapsed by now. Investors were to be wiped out in crashing stock markets around the world. The biggest prediction probably was that a disintegration of the Chinese economy would reduce the people to roaming hoards, looking for their next meal of tree bark and bugs. But like the deserted wastelands of “lahar country” after the Pinatubo eruption, the numerous doomsday web sites and those screaming about bursting financial bubbles have been reduced to just a die-hard few. As I have said before, these pre-
dictions of eventual financial Armageddon are correct. But what these people were wrong about is the timing in relation to the bigger picture of what moves the world. While ultimately everything is about money and the power that comes from it, the “gravity” that holds everything together is political. The “bubble-boys” talk about classic cases of the private sector creating problems like “Tulip Mania” and the “Dot-com bubble”. But these are all petty cash compared to what governments can do, even going back 5,000 years. The Roman Empire came to an end as successive emperors devalued
This year is the start of the political upheaval that will carry on into 2017, and more and more governments will feel the wrath of the people. By 2018, we will start seeing the result of 40 years of government fraud. The year 2020 will probably be when the economic system starts to fail, unless some honest political leaders take over sooner.
the currency by decreasing the silver content of the coins to enrich the government coffers. Then the treasury had to be emptied to create “social-welfare programs” to keep the people thinking they and their economy were doing just fine. In these modern times, government can’t take the silver from the coins because the coins have been silverless for decades. Now it is all done with debt. So should we worry not knowing where we are on the timeline to the eventual destruction of the financial world as we know it? Absolutely not. As the emperors continued to destroy the Roman economy through
plunging oil prices raised concern over global growth. By the second week of March, however, the Philippine Stock Exchange index (PSEi), which dropped to below 7,000 points at the height of the China-led financial turbulence, had climbed upward. By April 1, the PSEi closed at 7,245.15 points. The series of price increases adopted by local oil companies, following a sharp drop last year, are proof that global oil prices are recovering. The next president will assume office at the beginning of the second semester, which means he or she would have only six months to revitalize the economy for the year. However, the stabilizing conditions in the global economy, and the fundamental growth drivers of the Philippine economy—remittances continue to increase and the business-process outsourcing industry is still expanding—should help the next administration cope with the first major challenge of its six-year term. With the persistent problems of poverty and unemployment, the economy should not boom only during election years, which are held every three years, and then suffer a slump in the intervening periods. For comments, e-mail mbv.secretariat@ gmail.com or visit www.mannyvillar.com.ph.
inflation and high taxes, farmers quit farming and craftsmen quit making things and quietly moved away. The population of Rome dropped from 1.5 million to nearly zero in 200 years. Of course, things happen much faster in the 21st century. But first the governments go down, and then the political system breaks, and only then does the economic system falls apart. This year, 2016, is the start of the political upheaval that will carry on into 2017, and more and more governments will feel the wrath of the people. By 2018, we will start seeing the result of 40 years of government fraud. The year 2020 will probably be when the economic system starts to fail, unless some honest political leaders take over sooner. Until then, governments will do whatever is necessary to keep their power and, at the same time, keep the global economic system from collapsing. Enjoy the ride. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
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Can the Abu Sayyaf be defeated? Ernesto M. Hilario
ABOUT TOWN
T
HE Abu Sayyaf has struck again, this time taking as hostages four Malaysian boat crew members off Sempornah, Sabah. Reports from Malaysian authorities said eight gunmen on a speedboat intercepted the Malaysian MV Masfive 6 with a ninemember crew steaming off Pulau Ligitan last Friday. The gunmen took four of the Malaysian crew into their speedboat, leaving three Myanmar nationals and two Indonesians. They sped away with their four captives in the direction of the southern Philippine border. The military’s Western Mindanao Command has yet to confirm the report. But if the Abu Sayyaf were confirmed to be behind the kidnapping, this would be the second such hostage-taking in as many weeks. A week earlier, Abu Sayyaf gunmen seized 10 crew members of an Indonesian tugboat and brought them to Sulu. Subsequently, the vessel’s owners received a call from someone claiming to be from the bandit group demanding a ransom for the release of the captive sailors. How long will the bandit group operate with impunity? The Abu Sayyaf still holds two Canadian tourists and a Norwegian resort owner as hostages. They are demanding, according to news reports, P1 billion for each of the three captives. In 2015 Malaysian Bernard Then was kidnapped from a seaside restaurant in Sabah, which is only about 300 kilometers from Jolo Island, one of two strongholds of the Abu Sayyaf extremists. He was later executed by the group. Even way back, the Abu Sayyaf had staged several cross-border raids into Malaysia. The bandits seized 21 European and Asian tourists from a dive resort in April 2000. The hostages were released in batches after ransom was paid in 2001. All these point to a continuing security threat from the Abu Sayyaf that will have an adverse impact on the government’s capability to spur economic and social development in areas where the bandits operate. Basilan and Sulu are among the poorest provinces in the country. And for as long as the Abu Sayyaf is able to carry out kidnappings in these provinces and outlying areas—and even way out in nearby Sabah—southern Philippines will remain impoverished since development work cannot take place in an atmosphere where there is constant fear of Abu Sayyaf banditry. The government has worked over the years to settle the armed conflict in Muslim Mindanao, first with the Moro National Liberation Front (MNLF) and later the Moro Islamic Liberation Front (MILF). But peace remains elusive despite an agreement with the MILF and the proposed Bangsamoro basic law that would have established a separate Bangsamoro political entity exercising self-rule within the bounds of the Constitution. If the MNLF and MILF have been unable—or perhaps unwilling—to stop the Abu Sayyaf from carrying out kidnappings and atrocities in southern Philippines, and the Armed Forces similarly powerless to bring them to heel despite countless offensives in the past, southern Philippines will remain a no man’s land where poverty will persist for years to come.
Independent probe of Kidapawan dispersal
WE’RE glad that the Commission on Human Rights (CHR) will conduct a fact-finding investigation into Friday’s violent dispersal of a farmers’ protest in Kidapawan City that left three people dead and 116 injured. The CHR is the proper body to conduct an honest-to-goodness or impartial probe of the circumstances that led to the violent dispersal of some 6,000 farmers who were demanding government help as the raging dry spell had destroyed hundreds of hectares of farmland. An impartial investigation is needed as the two sides are blaming each other for the outbreak of violence. The farmers claim the police used excessive force in implementing an order from the provincial government to clear a vital stretch of the highway in North Cotabato. A support group of the protesting farmers is said to be verifying reports that two women were also killed during the dispersal, with 89 other protesters, including two minors, still missing. The police, on the other hand, insist the protesters started the melee, saying that two police officers are in critical condition due to head trauma. Earlier, PNP said more than 40 of its officers were injured after the protesters attacked them with poles, pieces of wood and large rocks. Given the conflicting accounts, a few things are clear. As pointed out by CHR Chairman Chito Gascon, lawenforcement personnel are barred from using live ammunition in crowd-dispersal operations. Law enforcers are not allowed to carry firearms within 100 meters from a group holding protest activity or rally, based on Section 13 of Batas Pambansa 880, or the Public Assembly Act of 1985. Corollary to this, the government has already adopted a policy of maximum tolerance when it comes to peaceful protest actions, perhaps after the bloody Mendiola massacre in 1987 during the Cory presidency. This policy is implemented, for instance, during the annual State of the Nation Address (Sona) of the president every July. The police do not carry high-powered firearms during the Sona because a bloody confrontation between the police and protesters during this annual event would appear incongruent with the Chief Executive reciting his glowing accomplishments inside Congress. It’s a different matter altogether, it appears, in the rural areas where the police and local governments couldn’t care less about mowing down unarmed protesters with automatic rifle fire based on a policy of maximum intolerance. In other words, in the countryside, it’s a killing zone where the operative policy seems to be nothing more than “shoot first, ask questions later.”
Email: ernhil@yahoo.com.
A rules-based Asean community Edgardo J. Angara
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HE 38th Governing Council Meeting of the Asean Law Association (ALA) was held in Ho Chi Minh City, Vietnam, over the weekend. A distinguished Philippine delegation included Chief Justice Maria Lourdes Sereno and Supreme Court (SC) Associate Justices Presbitero Velasco Jr. and Teresita de Castro; Court of Appeals Presiding Justice Andres Bernal Reyes Jr. and his colleagues Magdangal de Leon, Mario Villamor Lopez and Danton Bueser; and prominent bar leaders and academics, like UP Law Dean Danilo Concepcion. Lawyers Avelino Cruz and Regina Geraldez, Asean Law Association president and secretary-general, respectively; and former Chief Justice Artemio Panganiban headed the Philippine participation.
Chief Justices Dato Kifrawi Kifli of Brunei Darussalam, Muhammad Hatta Ali of Indonesia, Arifin Zakaria of Malaysia, Sundaresh Menon of Singapore and Veerapol Tungsawan of Thailand were also present. The idea of lawyers from Southeast Asian countries organized into one body, in line with the integration goal of the Association of Southeast Asian Nations (Asean), originated in a Jakarta conference in February 1979. With Dr. Teuku Mohammad Rahdie, I presented the proposal and the conference accepted it in principle. An Ad Hoc Working Committee was created to prepare a draft ALA Charter. The Working Committee included Dr. Sunaryati Hartono, then vice
Bloomberg View
S
EN. Bernie Sanders is waging an improbable presidential campaign, but he won’t disappear after this election. Nor will his followers: Perhaps they’ll be called the Bernie Brigade or Sanderistas. The Vermont socialist probably has no more than a 10-percent shot at winning the Democratic nomination—and that’s if something bad happens to Hillary Clinton or, less likely, if after winning in Wisconsin this week, he scores a huge upset in New York two weeks later and transforms the race.
Yet, Sanders, who for the left wing was a consolation choice after Sen. Elizabeth Warren wouldn’t run, has a message that will continue to resonate, especially among the multitudes of young supporters. The clarity and coherence of the campaign have surprised even those who sharply disagree with him. “Bernie has run a much better campaign than I ever thought he would,” says Trent Lott, the former Senate Republican leader and Mississippi conservative. Sanders is setting much of the Democratic agenda, forcing Clinton to move left by opposing the Trans-Pacific Partnership, the
chairman of the National Ombudsman Commission in Indonesia; Malaysian Federal Court Judge Datuk Harun Hashim; Tan Sook Yee, law dean of the National University of Singapore; T.P.B. Menon, then-president of the Law Society of Singapore; Chao Hick Tin, then from the Attorney-General Office of Singapore; and Dr. Kiethajorn Vachanavasti of Thammasat University. From the Philippines were SC Justice Felix Q. Antonio, CA Justice Serafin E. Camilon, outgoing president of the Integrated Bar of the Philippines (IBP) Marcelo B. Fernan and myself, as sitting IBP president. Serving as interim secretary-general was Dr. Teuku Mohammad Radhie, then director of the National Law Development Agency (Badan
Pembinaan Hukum Nasional) under the Indonesian Ministry of Law and Human Rights. A draft Charter was submitted a year later at the Kuala Lumpur Conference hosted by then Lord President (Chief Justice) of Malaysia Tun Mohammed Suffian. SC Justice Antonio, IBP EVP Ysidro Perez and myself presented the draft Charter and the Kuala Lumpur Conference endorsed it favorably to the General Assembly for approval. At ALA’s First General Assembly in November 1980 in Manila, the ALA Constitution and Bylaws were finally approved and promulgated. I was elected its founding president. ALA’s membership expanded later to include lawyers of Brunei Darussalam, Cambodia, Lao PDR, Myanmar and Vietnam. ALA’s objective was to bring closer together the legal profession across Asean and to become its legal arm for harmonizing the laws of member-states. Asean has come a long way since then. From the original 5, its membership has grown to 10 states with some 620 million population. A new Asean charter came to force and effect in 2008, which underscored that Asean is a rules-based organization. The Asean Economic Community (AEC) also came into full operation this year. And the 10-nation bloc has been identified as an engine of global growth and a strategic geopolitical force. At the ALA Governing Council Meeting in Ho Chi Minh City, UP Law Dean Danilo Concepcion proposed that a harmonized framework
China wants to power the world
Chinese President Xi Jinping publicly called for talks on establishing a global grid, while leading research organizations—including the Argonne National Laboratory and the Edison Electrical Institute—have participated in conferences looking at what would be needed to establish one. And whether it’s ever built, the technologies that underlie Liu’s big idea are already changing how power will be generated and transmitted in coming decades. The idea of an electricity “supergrid” goes back at least to the 1970s, when high-voltage direct current technologies were first developed. They allow for long-distance transmission of electricity with less loss of power than traditional systems that employ alternating currents. In North America high-voltage technology still isn’t used much.
making out like bandits while Main Street struggles. One virtual certainty: the next Treasury secretary won’t come from Wall Street. Sanders also has galvanized public outrage over Supreme Court decisions that unleashed a flood of big money into politics. Most Americans agree with him that the US system of money in politics is corrupt. Both President Bill Clinton and Barack Obama paid lip service to campaignfinance reform and then put it on the back burner. Sanders’s campaign ensures that another President Clinton won’t have that luxury. Some of his radical notions,
including sky-high taxes on the wealthy and a totally governmentrun health-care system, are nonstarters. But the public has moved closer to his view on economic fairness, and his call for free public higher education is a debate that will endure. Sanders has attracted extraordinary support from young voters, beating Clinton by huge margins. These Americans have grown up in tough times, with more limited opportunities. They’re skeptical about the establishment and the socialist label doesn’t have the negative connotation it does for many older Americans.
The question is whether Sanders will keep these young people politically energized. The last such cause-centric pied piper was Eugene McCarthy in 1968, though he basically checked out of Democratic politics after he lost the presidential nomination. Katy Harriger, a political scientist at Wake Forest University who has studied the youth vote, thinks that Sanders has the capacity to keep them mobilized on issues such as campaign financing and economic inequality. That engagement could carry to the off-year elections, when participation of young voters traditionally drops off.
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HINA’S State Grid Corp., the world’s biggest power company, is on an impressive buying binge. As Bloomberg News reports, the company is “actively in bidding” for power assets in Australia, hoping to add them to a portfolio of Italian, Brazilian and Filipino companies. The goal isn’t simply to invest, however. State Grid Chairman Liu Zhenya has a plan that he believes will stall global warming, put millions of people to work and bring about world peace by 2050.
Keystone pipeline and by frequently assailing Wall Street. Even Republicans have picked up some of his populist rhetoric. If, as the oddsmakers now predict, Clinton wins the nomination and the presidency, Sanders, with two years left in his Senate term, will be looking over her left shoulder. If Democrats, including the next president or the next Democratic Senate leader (likely Chuck Schumer of New York), cozy up to Wall Street, expect a Sanders-Warren barrage. The socalled bank bailout in 2008 probably prevented the economy from going over the cliff. But Sanders has reinforced a public sense that bankers are
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lengthy, highly technical book that Chairman Liu wrote to promote the concept, there would be no central power distributing authority. Rather, an Internet-like smart grid would distribute power as needed, its allocations shifting automatically as the globe turned and different regions reached their peak energy demand during the day. Technically, the vision is plausible. Power is transmitted today further than ever before, and smart grid technology is improving rapidly. But Liu’s vision faces considerable geopolitical hurdles, including laws (in Japan, for example) that prohibit importation of power from foreign countries. Likewise, it seems unlikely that China will be able to convince the nations who control the Arctic to open the region to Chinese energy investments. Then there’s the matter of cost. State Grid estimates it would cost $50 trillion to develop a truly global grid. That would require international buy-in over a period of decades. At a time when shorttermism and nationalism are rising worldwide, such a possibility seems remote. Still, there’s no reason to dismiss Liu’s ambitions. While a supergrid may never be built, bigger and bigger regional networks are sure to grow. The US, which is slowly modernizing its aging power grid, is uniquely positioned to develop an energy interconnection of its own, or to lead on a regional one. This may be one Chinese idea worth stealing.
BLOOMBERG VIEW
The idea is to connect these and other power grids to a global grid that will draw electricity from windmills at the North Pole and vast solar arrays in Africa’s deserts, and then distribute the power to all corners of the world. Among other benefits, according to Liu, the system will produce “a community of common destiny for all mankind with blue skies and green land.” It’s a crazy idea, of course. And if this so-called Global Energy Interconnection had been proposed by anyone other than the chairman of the world’s wealthiest power company, it wouldn’t deserve much consideration. But the $50 billion in cash generated by State Grid last year gives the company the deep pockets and political standing to put its priorities on the international energy agenda. Last September no less than
be established for liberalizing law practice in Asean. Dr. Tan Cheng Han of the National University of Singapore recommended a new format for the content and conduct of workshops during the ALA General Assembly to make deliberations more focused and optimize delegates’ participation. Nguyen Van Quyen from the Vietnamese ALA delegation proposed that ALA create a panel of lawyers and experts who will actively help find amicable solutions to the South China Sea maritime disputes consistent with rules of international law. Like the Philippines, Vietnam has openly protested China’s nine-dash line covering what Vietnam claims to be part of its sovereign territory. They are Hoang Sa archipelago (Paracels), about 120 nautical miles (nm) from Ly Son Island and the Truong Sa Archipelago (Spratlys), some 248 nm from Kanh Hoa Province. Asean—home to more than 620 million people—is the third-largest economic community in the world. The region is among the world’s most economically dynamic and culturally diverse. Such a large, multifaceted aggrupation can only move forward following a commonly shared rules-based conduct and polity. It’s been doing fairly well in its nearly half a century of existence. And ALA—the longest-surviving regional law association—has the unique opportunity and challenge to assist Asean achieve prosperity, peace and stability.
But in developing countries where sources of power—such as hydroelectrical dams—are often located far from end customers, they’re increasingly popular. China, the world’s biggest user, spent $65 billion on upgrading to high-voltage lines in 2014, in part to link geographically isolated wind farms to its fast-growing coastal cities. In some ways, extending the grid across national lines seems like a natural evolution. More than a decade ago, a German group proposed Desertec, a grid that would transmit solar power from North Africa to Europe. Meanwhile, in 2012, Masayoshi Son, chairman of Japan’s Softbank, proposed an “Asian Supergrid” that would rely upon giant wind farms in Mongolia to power South Korea, Japan, China and possibly Russia. Earlier this week, State Grid formally joined Softbank, Korea Electric Power, and Rosetti PJSC to study the feasibility of such a system. Any of these schemes would be a boon for wind- and solar-power producers. But because the grids envisioned are regional, they’d still suffer from the uncertainties of relying on renewables. In theory, a global grid would solve that problem by linking power generators at the poles and at the equator. In effect, the sun would never set on the Global Energy Interconnection, and power would flow day or night, cloudy or clear. The big question is how to manage such a system. As described in a
Adam Minter
Win or lose, Sandersism isn’t going away B A R. H
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US SecDef coming to observe ‘Balikatan’
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Inflation. . .
NITED States Defense Secretary Ashton Carter will fly to Manila to personally witness the war games involving more than 7,000 Filipino and American troops.
It will be the first time for a US defense secretary to fly to Manila for the bilateral exercise. The presence of Carter in the Exercise Balikatan, an annual military event testing the joint capability of the Armed Forces and the United States military to respond to regional crisis, was confirmed by US Marine Lt. Gen. John Toolan during the formal opening of the war games on Monday. “The secretary is going to be here toward the end of the exercise and he will actually observe a couple of things he’s very interested in…I believe that really, his main purpose here is to come and reaffirm that the relationship that we have with the Philippines is rock solid, and we’re side by side,” he said. Carter’s presence in the Balikatan would be the first for a US defense official and it would come as both the US and the
Philippines continuously voice their concerns over China’s aggressive military activities in the West Philippine Sea. Toolan said, aside from the reaffirmation of the PhilippineUS defense relations, Carter also wanted to see how the highmobility artillery rocket system works, especially that it would be the first time also that the US would use it in its joint training with the country. The weapon would be fired live at Crow Valley in Tarlac, along with the other equipment that the US will bring in. “What I mentioned earlier about the high-mobility artillery rocket system and how that works,” said Toolan of Carter’s visit. “He’s also going to spend some time out at sea with the US Navy ships that will be out there.” Toolan said it was Carter who
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BALIKATAN 2016 leaders lock arms to show solidarity at the commencement of the military bilateral training exercise (from left) AFP Vice Admiral Alexander Lopez, Philippine exercise director; Voltaire Gazmin, secretary of National Defense Philippines; Undersecretary Jesus I. Yabes, representative of Jose Rene Almendras, secretary of Foreign Affairs; His Excellency Philip Goldberg, US Ambassador to the Philippines; Gen. Hernando DC Iriberri, AFP chief of staff; US Marine Lt. John Toolan, US exercise director. MAU VICTA
wanted to visit the war games, which will run up to April 14 and would be joined by Australia and witnessed by the militaries of Southeast Asia. “He realized how important
it is, this exercise…so that’s why he’s coming,” the US Marine general said. Other than the use and firing of rockets, Toolan, said what is new in this year’s training is the use of command and
control in warfare. “We’re going to work on that command and control apparatus so that communications can be made very quickly and we can get response forces,” he said.
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I n p a r t ic u l a r, t he Monetar y Board decided to maintain the BSP’s key policy rates at 4 percent for the overnight borrowing or the reverse repurchase (RRP) facility and 6 percent for the overnight lending or the repurchase (RP) facility. The interest rates on term RRPs, RPs and SDAs were also kept steady. The reserve requirement ratios were, likewise, left unchanged. The BSP said the steady rates were based on their assessment of stable inflation, reiterating that the target range for this year and the next will still likely be attained. The central bank chief Amando M. Tetangco Jr. earlier said that inflation for March will likely settle between 0.6 percent to 1.4 percent. The Philippine Statistics Authority will release inflation numbers this week. The BSP, meanwhile, will be having its third monetary policy meeting on May 12. Bianca Cuaresma